10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM                TO
	COMMISSION FILE NUMBER 1-3551

EQT CORPORATION

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	25-0464690
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania	15222
(Address of principal executive offices)	(Zip code)

(412) 553-5700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ý	Accelerated Filer                 o
Non-Accelerated Filer    o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý

As of June 30, 2014, 151,502 (in thousands) shares of common stock, no par value, of the registrant were outstanding.

EQT CORPORATION AND SUBSIDIARIES

Index

		Page No.
Part I.      Financial Information:
Item 1.	Financial Statements (Unaudited):
	Statements of Consolidated Income for the Three and Six Months Ended June 30, 2014 and 2013	3
	Statements of Consolidated Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013	4
	Statements of Condensed Consolidated Cash Flows for the Six Months Ended June 30, 2014 and 2013	5
	Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	6 – 7
	Statements of Condensed Consolidated Equity for the Six Months Ended June 30, 2014 and 2013	8
	Notes to Condensed Consolidated Financial Statements	9 – 21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22 – 36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37 – 39
Item 4.	Controls and Procedures	39
Part II.     Other Information:
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42
Signature		43
Index to Exhibits		44

2

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

EQT CORPORATION AND SUBSIDIARIES

Statements of Consolidated Income (Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands, except per share amounts)
Operating revenues	$	526,168	$	473,093	$	1,187,793	$	888,976
Operating expenses:
Transportation and processing	51,723		35,866		96,898		72,597
Operation and maintenance	27,587		24,067		52,808		47,300
Production	31,882		27,747		63,822		52,636
Exploration	7,452		6,138		8,871		9,868
Selling, general and administrative	63,283		54,822		112,251		94,607
Depreciation, depletion and amortization	157,219		162,473		309,330		305,509
Total operating expenses	339,146		311,113		643,980		582,517
Gain on sale / exchange of assets	37,749		–		37,749		–
Operating income	224,771		161,980		581,562		306,459
Other income	2,579		2,041		5,130		4,322
Interest expense	31,873		37,384		63,841		75,136
Income before income taxes	195,477		126,637		522,851		235,645
Income taxes	59,089		38,078		175,424		72,846
Income from continuing operations	136,388		88,559		347,427		162,799
Income from discontinued operations, net of tax	1,876		5,559		1,772		40,600
Net income	138,264		94,118		349,199		203,399
Less: Net income attributable to noncontrolling interests	27,343		7,262		46,085		16,288
Net income attributable to EQT Corporation	$	110,921	$	86,856	$	303,114	$	187,111
Amounts attributable to EQT Corporation:
Income from continuing operations	$	109,045	$	81,297	$	301,342	$	146,511
Income from discontinued operations	1,876		5,559		1,772		40,600
Net income	$	110,921	$	86,856	$	303,114	$	187,111
Earnings per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding	151,744		150,525		151,522		150,425
Income from continuing operations	$	0.72	$	0.54	$	1.99	$	0.97
Income from discontinued operations	0.01		0.04		0.01		0.27
Net income	$	0.73	$	0.58	$	2.00	$	1.24
Diluted:
Weighted average common stock outstanding	152,570		151,393		152,537		151,191
Income from continuing operations	$	0.72	$	0.54	$	1.98	$	0.97
Income from discontinued operations	0.01		0.03		0.01		0.27
Net income	$	0.73	$	0.57	$	1.99	$	1.24
Dividends declared per common share	$	0.03	$	0.03	$	0.06	$	0.06

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

EQT CORPORATION AND SUBSIDIARIES

Statements of Consolidated Comprehensive Income (Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Net income	$	138,264	$	94,118	$	349,199	$	203,399
Other comprehensive (loss) income, net of tax:
Net change in cash flow hedges:
Natural gas, net of tax (benefit) expense of $(12,984), $41,436, $(27,880) and $(10,147)	(19,307)		62,939		(41,238)		(15,495)
Interest rate, net of tax expense of $25, $25, $50 and $50	36		36		72		72
Pension and other post-retirement benefits liability adjustment, net of tax expense of $113, $306, $227 and $613	176		436		352		869
Other comprehensive (loss) income	(19,095)		63,411		(40,814)		(14,554)
Comprehensive income	119,169		157,529		308,385		188,845
Less: Comprehensive income attributable to noncontrolling interests	27,343		7,262		46,085		16,288
Comprehensive income attributable to EQT Corporation	$	91,826	$	150,267	$	262,300	$	172,557

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

EQT CORPORATION AND SUBSIDIARIES

Statements of Condensed Consolidated Cash Flows (Unaudited)

	Six Months Ended
	June 30,
	2014			2013
	(Thousands)
Cash flows from operating activities:
Net income	$	349,199	$		203,399
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	54,577		63,252
Depreciation, depletion, and amortization	309,330		317,693
Gain on sale / exchange of assets	(37,749)		–
Gain on dispositions	(3,598)		–
Provision for losses on accounts receivable	919		2,246
Other income	(5,130)		(4,441)
Stock-based compensation expense	20,810		27,480
Loss recognized in operating revenues for hedging ineffectiveness	21,273		7,954
Loss (gain) on derivatives not designated as hedges	17,879		(1,250)
Cash settlements on derivatives not designated as hedges	(10,836)		372
Lease impairment	6,519		8,133
Changes in other assets and liabilities:
Dividend from Nora Gathering, LLC	9,463		4,500
Excess tax benefits on stock-based compensation	(28,497)		–
Accounts receivable and unbilled revenues	(443)		(11,093)
Inventory	6,267		23,952
Accounts payable	50,952		(18,005)
Other items, net	33,712		(27,232)
Net cash provided by operating activities	794,647		596,960
Cash flows from investing activities:
Capital expenditures from continuing operations	(1,023,747)		(777,990)
Capital expenditures associated with Range asset exchange	(157,256)		–
Capital expenditures from discontinued operations	–		(15,163)
Restricted cash, net	(342,744)		–
Proceeds from sale of assets	7,444		–
Net cash used in investing activities	(1,516,303)		(793,153)
Cash flows from financing activities:
Proceeds from the issuance of common units of EQT Midstream Partners, LP, net of issuance costs	902,451		–
Increase in short-term loans	450,000		185,500
Decrease in short-term loans	(120,000)		(130,500)
Dividends paid	(9,101)		(9,038)
Distributions to noncontrolling interests	(25,674)		(10,350)
Repayments and retirements of long-term debt	(3,169)		(20,161)
Proceeds and tax benefits from exercises under employee compensation plans	42,042		15,387
Cash paid for taxes related to net settlement of share-based payment awards	(48,826)		–
Revolving credit facility origination fees	(5,075)		–
Repurchase and retirement of common stock	(32,368)		–
Net cash provided by financing activities	1,150,280		30,838
Net change in cash and cash equivalents	428,624		(165,355)
Cash and cash equivalents at beginning of period	845,641		182,055
Cash and cash equivalents at end of period	$	1,274,265	$		16,700
Cash paid during the period for:
Interest, net of amount capitalized	$	62,519	$		75,281
Income taxes, net	$	89,050	$		25,061

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

EQT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

	June 30,		December 31,
	2014		2013
	(Thousands)
Assets
Current assets:
Cash and cash equivalents	$	1,274,265	$	845,641
Restricted cash	342,744		–
Accounts receivable (less accumulated provision for doubtful accounts: $6,139 at June 30, 2014 and $5,171 at December 31, 2013)	235,306		235,781
Inventory	13,389		19,656
Derivative instruments, at fair value	66,408		107,647
Prepaid expenses and other	32,065		46,700
Total current assets	1,964,177		1,255,425
Equity in nonconsolidated investments	–		128,983
Property, plant and equipment	12,372,135		11,062,136
Less: accumulated depreciation and depletion	3,024,600		2,728,374
Net property, plant and equipment	9,347,535		8,333,762
Other assets	74,224		73,883
Total assets	$	11,385,936	$	9,792,053

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

6

EQT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

	June 30,		December 31,
	2014		2013
	(Thousands)
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	11,086	$	11,162
Short-term loans	330,000		–
Accounts payable	381,280		330,329
Derivative instruments, at fair value	58,116		29,651
Other current liabilities	168,483		152,268
Total current liabilities	948,965		523,410
Long-term debt	2,486,533		2,490,354
Deferred income taxes	1,654,506		1,655,765
Other liabilities and credits	265,999		258,396
Total liabilities	5,356,003		4,927,925
Equity:
Stockholders’ equity:
Common stock, no par value, authorized 320,000 shares, shares issued: 175,384 at June 30, 2014 and 175,684 at December 31, 2013	1,861,468		1,869,843
Treasury stock, shares at cost: 23,882 at June 30, 2014 and 24,800 at December 31, 2013	(431,149)		(447,738)
Retained earnings	2,842,384		2,567,980
Accumulated other comprehensive income	3,889		44,703
Total common stockholders’ equity	4,276,592		4,034,788
Noncontrolling interests in consolidated subsidiaries	1,753,341		829,340
Total equity	6,029,933		4,864,128
Total liabilities and equity	$	11,385,936	$	9,792,053

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

7

EQT CORPORATION AND SUBSIDIARIES

Statements of Condensed Consolidated Equity (Unaudited)

	Common Stock					Accumulated Other		Noncontrolling Interests in
	Shares Outstanding	No Par Value		Retained Earnings		Comprehensive Income		Consolidated Subsidiaries		Total Equity
	(Thousands)
Balance, January 1, 2013	150,109	$	1,308,771	$	2,195,502	$	99,547	$	284,982	$	3,888,802
Net income				187,111				16,288		203,399
Other comprehensive loss						(14,554)				(14,554)
Dividends ($0.06 per share)				(9,038)						(9,038)
Stock-based compensation plans, net	485	43,737						229		43,966
Distributions to noncontrolling interests ($0.72 per common unit)								(10,350)		(10,350)
Balance, June 30, 2013	150,594	$	1,352,508	$	2,373,575	$	84,993	$	291,149	$	4,102,225
Balance, January 1, 2014	150,884	$	1,422,105	$	2,567,980	$	44,703	$	829,340	$	4,864,128
Net income				303,114				46,085		349,199
Other comprehensive loss						(40,814)				(40,814)
Dividends ($0.06 per share)				(9,101)						(9,101)
Stock-based compensation plans, net	918	20,973						1,139		22,112
Distributions to noncontrolling interests ($0.95 per common unit)								(25,674)		(25,674)
Issuance of common units of EQT Midstream Partners, LP								902,451		902,451
Repurchase and retirement of common stock	(300)	(12,759)		(19,609)						(32,368)
Balance, June 30, 2014	151,502	$	1,430,319	$	2,842,384	$	3,889	$	1,753,341	$	6,029,933

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

8

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

A.Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by United States GAAP for complete financial statements.  In the opinion of management, these statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQT Corporation and subsidiaries as of June 30, 2014 and December 31, 2013, the results of its operations for the three and six month periods ended June 30, 2014 and 2013 and its cash flows for the six month periods ended June 30, 2014 and 2013.  In this Quarterly Report on Form 10-Q, references to “we,” “us,” “our,” “EQT,” “EQT Corporation,” and the “Company” refer collectively to EQT Corporation and its consolidated subsidiaries.

Certain previously reported amounts have been reclassified to conform to the current year presentation. Additionally, financial statements and notes to the financial statements previously reported in prior periods have been recast to reflect the presentation of discontinued operations as a result of the Equitable Gas Transaction. Refer to Note B for additional information regarding discontinued operations.

The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by United States GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in EQT Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013 as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 22 of this Quarterly Report on Form 10-Q.

B.Discontinued Operations

On December 17, 2013, the Company and its wholly-owned subsidiary Distribution Holdco, LLC (Holdco) completed the disposition of their ownership interests in Equitable Gas Company, LLC (Equitable Gas) and Equitable Homeworks, LLC (Homeworks) to PNG Companies LLC (the Equitable Gas Transaction). Equitable Gas and Homeworks comprised substantially all of the Company’s previously reported Distribution segment.  The financial information of Equitable Gas and Homeworks is reflected as discontinued operations for all periods presented in these financial statements.  Prior periods have been recast to reflect this presentation.

During the second quarter of 2014, the Company received additional cash proceeds of $7.4 million as a result of post-closing purchase price adjustments for the Equitable Gas Transaction. The Company recognized an additional gain of $3.6 million for the three and six months ended June 30, 2014, included in income from discontinued operations, net of tax, in the Statements of Consolidated Income. As consideration for the Equitable Gas Transaction, the Company received total cash proceeds of $748.0 million, select midstream assets (including the Allegheny Valley Connector) with a fair value of $140.3 million and other contractual assets with a fair value of $32.5 million.

The following table summarizes the components of discontinued operations activity:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Operating revenues	$	–	$	56,573	$	–	$	210,619
Income from discontinued operations before income taxes	3,258		9,384		3,077		63,590
Income tax expense	1,382		3,825		1,305		22,990
Income from discontinued operations, net of tax	$	1,876	$	5,559	$	1,772	$	40,600

9

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

C.EQT Midstream Partners, LP

In 2012, the Company formed EQT Midstream Partners, LP (the Partnership) (NYSE: EQM) to own, operate, acquire and develop midstream assets in the Appalachian Basin. The Partnership provides midstream services to the Company and other third parties. The Partnership is consolidated in the Company’s consolidated financial statements. The Company records the noncontrolling interest of the public limited partners in its financial statements.

On May 7, 2014, a wholly-owned subsidiary of the Company contributed the Jupiter gathering system to EQM Gathering Opco, LLC (EQM Gathering), a wholly-owned subsidiary of the Partnership (the Jupiter Transaction) in exchange for $1.18 billion.  EQM Gathering is consolidated by the Company as it is still controlled by the Company.

On May 7, 2014, the Partnership completed an underwritten public offering of 12,362,500 common units, which included the full exercise of the underwriters’ overallotment option, representing Partnership limited partner interests. The Partnership received net proceeds of approximately $902.5 million from the offering, after deducting the underwriters’ discount and offering expenses of approximately $34 million. As of June 30, 2014, the Company held a 2% general partner interest, all incentive distribution rights and a 34.4% limited partner interest in the Partnership. The Company’s limited partner interest in the Partnership consists of 3,959,952 common units and 17,339,718 subordinated units.

While the Company did not record a gain for accounting purposes as a result of the Jupiter Transaction, the Company recognized a taxable gain for federal income tax purposes of approximately $569.3 million in 2014. In conjunction with the Jupiter Transaction, $500.0 million of the proceeds received were placed into a qualified trust account pursuant to a deferred exchange agreement, which allows for the use of the funds in a potential like-kind exchange for certain identified assets.  The Company utilized $157.3 million of these funds in connection with the exchange of certain assets with Range Resources Corporation (see Note K) and is evaluating the potential purchase of other eligible replacement properties within the statutory time period, which expires November 3, 2014.  As of June 30, 2014, the Company had restricted cash of $342.7 million in its Condensed Consolidated Balance Sheets.

D.Financial Information by Business Segment

Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and which are subject to evaluation by the Company’s chief operating decision maker in deciding how to allocate resources.

The Company reports its operations in two segments, which reflect its lines of business.  The EQT Production segment includes the Company’s exploration for, and development and production of, natural gas, natural gas liquids (NGLs) and a limited amount of crude oil in the Appalachian and Permian Basins.  The EQT Midstream segment’s operations include the natural gas gathering, transportation, storage and marketing activities of the Company, including ownership and operation of the Partnership.

Operating segments are evaluated on their contribution to the Company’s consolidated results based on operating income. Other income, interest and income taxes are managed on a consolidated basis. Headquarters’ costs are billed to the operating segments based upon an allocation of the headquarters’ annual operating budget.  Differences between budget and actual headquarters’ expenses are not allocated to the operating segments.

The Company’s management reviews and reports the EQT Production segment results with third-party transportation and processing costs reflected as a deduction from operating revenues. Third-party costs incurred to gather, process and transport gas produced by EQT Production to market sales points are recorded as a portion of transportation and processing costs in the Statements of Consolidated Income. Some transportation costs incurred by the Company are marketed for resale and are not incurred to transport gas produced by EQT Production.  These transportation costs are reflected as a deduction from operating revenues.

Substantially all of the Company’s operating revenues, income from operations and assets are generated or located in the United States.

10

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Revenues from external customers:
EQT Production	$	322,100	$	306,132	$	789,845	$	556,643
EQT Midstream	162,345		150,366		328,571		297,054
Third-party transportation and processing costs (a)	51,432		34,827		96,061		70,568
Less intersegment revenues, net (b)	(9,709)		(18,232)		(26,684)		(35,289)
Total	$	526,168	$	473,093	$	1,187,793	$	888,976
Operating income:
EQT Production (c)	$	144,689	$	105,056	$	421,894	$	179,153
EQT Midstream (c)	88,527		72,246		171,596		146,460
Unallocated expenses (d)	(8,445)		(15,322)		(11,928)		(19,154)
Total operating income	$	224,771	$	161,980	$	581,562	$	306,459

Reconciliation of operating income to income from continuing operations:

Other income	$	2,579	$	2,041	$	5,130	$	4,322
Interest expense	31,873		37,384		63,841		75,136
Income taxes	59,089		38,078		175,424		72,846
Income from continuing operations	$	136,388	$	88,559	$	347,427	$	162,799

	As ofJune 30, 2014		As ofDecember 31, 2013
	(Thousands)
Segment assets:
EQT Production	$	7,191,308	$	6,359,065
EQT Midstream	2,486,643		2,514,429
Total operating segments	9,677,951		8,873,494
Headquarters assets, including cash and short-term investments	1,707,985		918,559
Total assets	$	11,385,936	$	9,792,053

(a)	This amount reflects the reclassification of third-party transportation and processing costs from operating revenues to transportation and processing costs at the consolidated level.
(b)	Includes entries to eliminate intercompany natural gas sales from EQT Production to EQT Midstream. The Company also had $9.1 million and $20.0 million for the three and six months ended June 30, 2013, respectively, of intercompany eliminations for transmission and storage services between EQT Midstream and the Company’s previously reported Distribution segment that were recast to discontinued operations as a result of the Equitable Gas Transaction. These recast adjustments had no impact on the Company’s net income for either of the three or six month periods ended June 30, 2013.
(c)	Gains on sales / exchanges of assets of $31.0 million and $6.8 million are included in EQT Production and EQT Midstream operating income, respectively, for the three and six months ended June 30, 2014.
(d)	Unallocated expenses consist primarily of incentive compensation expense, administrative costs and, for the three and six months ended June 30, 2013, corporate overhead charges previously allocated to the Distribution segment that were reclassified to Headquarters as part of the recast of the 2013 financial information in this Quarterly Report on Form 10-Q.

11

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Depreciation, depletion and amortization:
EQT Production	$	136,251	$	144,073	$	267,490	$	268,982
EQT Midstream	21,130		18,452		42,139		36,671
Other	(162)		(52)		(299)		(144)
Total	$	157,219	$	162,473	$	309,330	$	305,509
Expenditures for segment assets (e):
EQT Production (f)	$	930,228	$	394,391	$	1,338,559	$	637,566
EQT Midstream	110,913		89,060		194,126		138,204
Other	802		1,872		1,362		2,220
Total	$	1,041,943	$	485,323	$	1,534,047	$	777,990

(e)Excludes non-cash capital expenditures of $3.6 million and $5.9 million for the three months ended June 30, 2014 and 2013, respectively, and $8.1 million and $11.9 million for the six months ended June 30, 2014 and 2013, respectively.  The Company capitalizes certain labor overhead costs including a portion of non-cash stock-based compensation expense.

(f)Includes $157.3 million of cash capital expenditures and $353.0 million of non-cash capital expenditures for the exchange of assets with Range Resources Corporation (described in Note K) for the three and six months ended June 30, 2014. Expenditures for segment assets in the EQT Production segment include $550.5 million and $128.9 million for property acquisitions during the three months ended June 30, 2014 and 2013, respectively, and $609.7 million and $141.6 million for property acquisitions during the six months ended June 30, 2014 and 2013, respectively.

E.Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the operating results of the Company primarily at EQT Production and the storage, marketing and other activities at EQT Midstream. The Company’s overall objective in its hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

The Company uses over the counter (OTC) derivative commodity instruments that are primarily placed with financial institutions, and the creditworthiness of these institutions is regularly monitored. The Company also uses exchange traded futures contracts that obligate the Company to buy or sell a designated commodity at a future date for a specified price and quantity at a specified location. Swap agreements involve payments to or receipts from counterparties based on the differential between two prices for the commodity. Collar agreements require the counterparty to pay the Company if the index price falls below the floor price and the Company to pay the counterparty if the index price rises above the cap price. The Company may also engage in a limited number of basis swaps to protect earnings from undue exposure to the risk of geographic disparities in commodity prices and interest rate swaps to hedge exposure to interest rate fluctuations on potential debt issuances.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. These assets and liabilities are reported in the Condensed Consolidated Balance Sheets as derivative instruments at fair value. These derivative instruments are reported as either current assets or current liabilities due to their highly liquid nature. The Company can net settle its derivative instruments at any time.

The accounting for the changes in fair value of the Company’s derivative instruments depends on the use of the derivative instruments.  To the extent that a derivative instrument has been designated and qualifies as a cash flow hedge, the effective portion of the change in fair value of the derivative instrument is reported as a component of accumulated other comprehensive income (OCI), net of tax, and is subsequently reclassified into the Statements of Consolidated Income in the same period or periods during which the forecasted transaction affects earnings.  In conjunction with the exchange of assets with Range Resources Corporation that closed on June 16, 2014 (see Note K), the Company de-designated certain derivative instruments that were previously designated as cash flow hedges because it was probable that the forecasted transactions would not occur, resulting in a pre-tax gain of $28.0 million

12

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

recorded within gain on sale / exchange of assets in the Statements of Consolidated Income for the three and six months ended June 30, 2014.  Any subsequent changes in fair value of these derivative instruments are recognized within operating revenues in the Statements of Consolidated Income each period.

For a derivative instrument designated and qualified as a fair value hedge, the change in the fair value of the instrument is recognized as a portion of operating revenues in the Statements of Consolidated Income each period.  In addition, the change in the fair value of the hedged item (natural gas inventory) was recognized as a portion of operating revenues in the Statements of Consolidated Income. The Company elected to exclude the spot/forward differential for the assessment of effectiveness of the fair value hedges.

Most of the derivative commodity instruments used by the Company to hedge its exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sale of equity production have been designated and qualify as cash flow hedges. Historically, some of the derivative commodity instruments used by the Company to hedge its exposure to adverse changes in the market price of natural gas stored in the ground were designated and qualified as fair value hedges. These positions were de-designated effective October 1, 2013. Basis swaps are not designated as cash flow hedges. Any hedging ineffectiveness and any change in fair value of derivative instruments that have not been designated as hedges are recognized in the Statements of Consolidated Income each period.

The Company also enters into fixed price natural gas sales agreements that are satisfied by physical delivery.  These physical commodity contracts qualify for the normal purchases and sales exception and are not subject to derivative instrument accounting.

Exchange-traded instruments are generally settled with offsetting positions. OTC arrangements require settlement in cash. Settlements of derivative commodity instruments are reported as a component of cash flows from operations in the accompanying Statements of Condensed Consolidated Cash Flows.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Commodity derivatives designated as cash flow hedges
Amount of (loss) gain recognized in OCI (effective portion), net of tax	$	(13,455)	$	73,429	$	(52,649)	$	20,828
Amount of gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets due to forecasted transactions probable to not occur	16,735		–		16,735		–
Amount of (loss) gain reclassified from accumulated OCI into operating revenues (effective portion), net of tax	(10,883)		10,490		(28,146)		36,323
Amount of gain (loss) recognized in operating revenues (ineffective portion) (a)	987		(7,473)		(21,273)		(7,954)
Interest rate derivatives designated as cash flow hedges
Amount of loss reclassified from accumulated OCI, net of tax, into interest expense (effective portion)	$	36	$	36	$	72	$	72
Commodity derivatives designated as fair value hedges (b)
Amount of gain (loss) recognized in operating revenues for fair value commodity contracts	$	–	$	2,700	$	–	$	(839)
Fair value (loss) gain recognized in operating revenues for inventory designated as hedged item	–		(4,075)			–	462
Derivatives not designated as hedging instruments
Amount of (loss) gain recognized in operating revenues	$	(8,525)	$	1,512	$	(17,879)	$	1,250

(a)No amounts have been excluded from effectiveness testing of cash flow hedges.

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EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(b)For the three months ended June 30, 2013, the net impact on operating revenues consisted of a $0.8 million gain due to the exclusion of the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $2.2 million loss due to changes in basis. For the six months ended June 30, 2013, the net impact on operating revenues consisted of a $2.1 million gain due to the exclusion of the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $2.5 million loss due to changes in basis.

	As of June 30,		As of December 31,
	2014		2013
	(Thousands)
Asset derivatives
Commodity derivatives designated as hedging instruments	$	33,942	$	104,430
Commodity derivatives not designated as hedging instruments	32,466		3,217
Total asset derivatives	$	66,408	$	107,647
Liability derivatives
Commodity derivatives designated as hedging instruments	$	47,713	$	27,618
Commodity derivatives not designated as hedging instruments	10,403		2,033
Total liability derivatives	$	58,116	$	29,651

The net fair value of derivative commodity instruments changed during the first half of 2014 primarily as a result of increased New York Mercantile Exchange (NYMEX) forward prices and settlements.  The absolute quantities of the Company’s derivative commodity instruments that have been designated and qualify as cash flow hedges totaled 307 Bcf and 398 Bcf as of June 30, 2014 and December 31, 2013, respectively, and are primarily related to natural gas swaps and collars. The open positions at June 30, 2014 and December 31, 2013 had maturities extending through December 2018 and December 2017, respectively.

The Company deferred net gains of $20.5 million and $61.7 million in accumulated OCI, net of tax, as of June 30, 2014 and December 31, 2013, respectively, associated with the effective portion of the change in fair value of its derivative commodity instruments designated as cash flow hedges. Assuming no change in price or new transactions, the Company estimates that approximately $8.5 million of net unrealized gains on its derivative commodity instruments reflected in accumulated OCI, net of tax, as of June 30, 2014 will be recognized in earnings during the next twelve months due to the settlement of hedged transactions.

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts.  This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. The Company believes that NYMEX traded futures contracts have limited credit risk because Commodity Futures Trading Commission regulations are in place to protect exchange participants, including the Company, from potential financial instability of the exchange members. The Company’s OTC swap and collar derivative instruments are primarily placed with financial institutions and thus are subject to events that would impact those companies individually as well as that industry as a whole.

The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposures.  These include closely monitoring current market conditions, counterparty credit fundamentals and credit default swap rates.  Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals. To manage the level of credit risk, the Company enters into transactions with financial counterparties that are of investment grade or better, enters into netting agreements whenever possible and may obtain collateral or other security.

When the net fair value of any of the Company’s swap agreements represents a liability to the Company which is in excess of the agreed-upon threshold between the Company and the financial institution acting as counterparty, the counterparty requires the Company to remit funds to the counterparty as a margin deposit for the derivative liability which is in excess of the threshold amount.  The Company records these deposits as a current asset.  When the net fair value of any of the Company’s swap agreements represents an asset to the Company which is in excess of the agreed-upon threshold between the Company and the financial institution acting as counterparty, the Company requires the counterparty to remit funds as margin deposits in an amount equal to the portion of the derivative asset

14

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

which is in excess of the threshold amount. The Company records a current liability for such amounts received.  The Company had no such deposits in its Condensed Consolidated Balance Sheets as of June 30, 2014 or December 31, 2013.

When the Company enters into exchange-traded natural gas contracts, exchanges may require the Company to remit funds to the corresponding broker as good-faith deposits to guard against the risks associated with changing market conditions.  The Company must make such deposits based on an established initial margin requirement as well as the net liability position, if any, of the fair value of the associated contracts.  The Company records these deposits as a current asset in the Condensed Consolidated Balance Sheets.  In the case where the fair value of such contracts is in a net asset position, the broker may remit funds to the Company, in which case the Company records a current liability for such amounts received. The initial margin requirements are established by the exchanges based on the price, volatility and the time to expiration of the related contract.  The margin requirements are subject to change at the exchanges’ discretion.  The Company recorded current assets of $0.1 million and $0.3 million as of June 30, 2014 and December 31, 2013, respectively, for such deposits in its Condensed Consolidated Balance Sheets.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. Margin deposits remitted to financial counterparties or received from financial counterparties related to OTC natural gas swap agreements and options and any funds remitted to or deposits received from the Company’s brokers are recorded on a gross basis.  The Company has netting agreements with financial institutions and its brokers that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities. The table below reflects the impact of netting agreements and margin deposits on gross derivative assets and liabilities as of June 30, 2014 and December 31, 2013.

As of June 30, 2014	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	66,408	$	(26,331)	$	–	$	40,077
Liability derivatives:
Derivative instruments, at fair value	$	58,116	$	(26,331)	$	(103)	$	31,682

As of December 31, 2013	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to  master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	107,647	$	(20,843)	$	–	$	86,804
Liability derivatives:
Derivative instruments, at fair value	$	29,651	$	(20,843)	$	(266)	$	8,542

Certain of the Company’s derivative instrument contracts provide that if the Company’s credit ratings by Standard & Poor’s Ratings Services (S&P) or Moody’s Investors Services (Moody’s) are lowered below investment grade, additional collateral must be deposited with the counterparty.  The additional collateral can be up to 100% of the derivative liability.  As of June 30, 2014, the aggregate fair value of all derivative instruments with credit risk-related contingent features that were in a net liability position was $31.9 million, for which the Company had no collateral posted on June 30, 2014.  If the Company’s credit rating by S&P or Moody’s had been downgraded below investment grade on June 30, 2014, the Company would have been required to post $1.1 million of additional

15

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

collateral under the agreements with the respective counterparties.  Investment grade refers to the quality of the Company’s credit as assessed by one or more credit rating agencies. The Company’s senior unsecured debt was rated BBB by S&P and Baa3 by Moody’s at June 30, 2014.  In order to be considered investment grade, the Company must be rated BBB- or higher by S&P and Baa3 or higher by Moody’s.  Anything below these ratings is considered non-investment grade.

F.Fair Value Measurements

The Company records its financial instruments, principally derivative instruments, at fair value in its Condensed Consolidated Balance Sheets.  The Company has an established process for determining fair value which is based on quoted market prices, where available.  If quoted market prices are not available, fair value is based upon models that use as inputs market-based parameters, including but not limited to forward curves, discount rates, volatilities and nonperformance risk.  Nonperformance risk considers the effect of the Company’s credit standing on the fair value of liabilities and the effect of the counterparty’s credit standing on the fair value of assets.  The Company estimates nonperformance risk by analyzing publicly available market information, including a comparison of the yield on debt instruments with credit ratings similar to the Company’s or counterparty’s credit rating and the yield of a risk-free instrument.  The Company also considers credit default swaps rates where applicable.

The Company has categorized its assets and liabilities recorded at fair value into a three-level fair value hierarchy, based on the priority of the inputs to the valuation technique.  The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).  Assets and liabilities included in Level 1 include the Company’s futures contracts.  Assets and liabilities in Level 2 include the Company’s swap and collar agreements. As of December 31, 2013, the Company transferred $54.4 million of derivative instruments, primarily its collars, from Level 3 into Level 2.

The fair value of the assets and liabilities included in Level 2 is based on standard industry income approach models that use significant observable inputs, including NYMEX forward curves, LIBOR-based discount rates and basis forward curves.  The Company’s collars are valued using standard industry income approach models and were historically classified in Level 3 because the volatility assumption in the option pricing model was not observable over the full duration of the collars.  Effective December 31, 2013, the volatility assumption in the option pricing model is observable for the duration of the term of the collars outstanding. This change did not have a significant impact on the fair value of the derivative instruments previously included in Level 3. The significant observable inputs utilized by the option pricing model include NYMEX forward curves, natural gas volatilities and LIBOR-based discount rates.

The Company uses NYMEX forward curves to value futures, commodity swaps and collars. The NYMEX forward curves, LIBOR-based discount rates, natural gas volatilities and basis forward curves are validated to external sources at least monthly.

The following assets and liabilities were measured at fair value on a recurring basis during the applicable period:

			Fair value measurements at reporting date using
Description	As of June 30, 2014		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	66,408	$	123	$	66,285	$	–
Liabilities
Derivative instruments, at fair value	$	58,116	$	–	$	58,116	$	–

16

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

			Fair value measurements at reporting date using
Description	As of December 31, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	107,647	$	240	$	107,407	$	–
Liabilities
Derivative instruments, at fair value	$	29,651	$	315	$	29,336	$	–

	Fair value measurements using significant unobservable inputs (Level 3) Derivative instruments, at fair value, net
	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(Thousands)
Beginning of period	$	–	$	69,865	$	–	$	90,714
Total gains or losses:
Included in earnings	–		(1,178)		–		(755)
Included in OCI	–		13,125		–		1,392
Purchases	–		–		–		72
Settlements	–		(7,124)		–		(16,735)
Transfers in and/or out of Level 3	–		–		–		–
End of period	$	–	$	74,688	$	–	$	74,688

Losses of $1.2 million are included in earnings in the table above for the three and six months ended June 30, 2013, respectively, attributable to the change in unrealized gains or losses relating to assets held as of June 30, 2013.

The carrying value of cash equivalents approximates fair value due to the short maturity of the instruments; these are considered Level 1 fair values.

The Company estimates the fair value of its debt using its established fair value methodology.  Because not all of the Company’s debt is actively traded, the fair value of the debt is a Level 2 fair value measurement.  Fair value for non-traded debt obligations is estimated using a standard industry income approach model which utilizes a discount rate based on market rates for debt with similar remaining time to maturity and credit risk.  The estimated fair value of long-term debt on the Condensed Consolidated Balance Sheets at June 30, 2014 and December 31, 2013 was approximately $2.9 billion and $2.8 billion, respectively.

For information on the fair value of certain assets acquired from the exchange of properties with Range Resources Corporation, see Note K.

G.Income Taxes

The Company estimates an annual effective income tax rate based on projected results for the year and applies this rate to income before taxes to calculate income tax expense.  However, while all of the Partnership’s earnings are included in the Company’s net income, the Company is not required to record income tax expense with respect to the portion of the Partnership’s earnings allocated to its noncontrolling public limited partners, which reduces the Company’s effective tax rate.  Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period.

17

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company’s effective income tax rate for the six months ended June 30, 2014 was 33.6%, compared to 30.9% for the six months ended June 30, 2013.  The increase in the effective income tax rate from the first half of 2013 is primarily attributable to a reduction in a valuation allowance related to bonus depreciation for state tax purposes in 2013, increased state tax expense in 2014 due to higher natural gas prices and production sales volumes as well as increased tax reserves recorded in certain states in 2014, partially offset by the impact of the Partnership’s ownership structure.

There were no material changes to the Company’s methodology for determining unrecognized tax benefits during the three months ended June 30, 2014.  The Company believes that it is appropriately reserved for uncertain tax positions.

H.Revolving Credit Facilities

As of June 30, 2014 and December 31, 2013, the Company had no loans or letters of credit outstanding under its revolving credit facility. The Company did not have any short-term loans outstanding at any time during the three and six months ended June 30, 2014 under its revolving credit facility. The maximum amount of the Company’s outstanding short-term loans at any time was $178.5 million during the three and six months ended June 30, 2013. The average daily balance of short-term loans outstanding was approximately $26.7 million and $13.4 million during the three and six months ended June 30, 2013, respectively, at weighted average interest rates of 0.83% and 0.41%, respectively.

As of June 30, 2014, the Partnership had $330 million of loans and no letters of credit outstanding under its revolving credit facility. As of December 31, 2013, the Partnership had no loans or letters of credit outstanding under its revolving credit facility. The maximum amount of outstanding short-term loans at any time under the Partnership’s revolving credit facility was $450 million during the three and six months ended June 30, 2014. The average daily balance of short-term loans outstanding was approximately $252.2 million and $173.0 million during the three and six months ended June 30, 2014, respectively, at a weighted average annual interest rate of 1.66% and 1.68%, respectively. The Partnership had no short-term loans outstanding at any time during the three and six months ended June 30, 2013.

The Company incurred commitment fees averaging approximately 6 basis points for the three months ended June 30, 2014 and 2013, and 12 basis points and 11 basis points for the six months ended June 30, 2014 and 2013, respectively, to maintain credit availability under its revolving credit facility. The Partnership incurred commitment fees averaging approximately 6 basis points and 13 basis points for the three and six months ended June 30, 2014 and 2013, respectively, to maintain credit availability under its revolving credit facility.

I.Earnings Per Share

Potentially dilutive securities, consisting of options and restricted stock awards, which were included in the calculation of diluted earnings per share, totaled 825,907 and 867,373 for the three months ended June 30, 2014 and 2013, respectively, and 1,014,746 and 766,054 for the six months ended June 30, 2014 and 2013, respectively.  There were no options to purchase common stock which were excluded from potentially dilutive securities because they were anti-dilutive for the three and six months ended June 30, 2014 and 2013.  The impact of the Partnership’s dilutive units did not have a material impact on the Company’s earnings per share calculations for any of the periods presented.

18

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

J.         Changes in Accumulated Other Comprehensive Income by Component

The following tables explain the changes in accumulated OCI by component during the applicable period:

	Three Months Ended June 30, 2014
	Natural gas cash flow hedges, net of tax						Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of April 1, 2014	$				39,768		$	(1,096)			$	(15,688)			$	22,984
Losses recognized in accumulated OCI, net of tax	(13,455)					(a)	–				–				(13,455)
Gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets	(16,735)					(a)	–				–				(16,735)
Losses reclassified from accumulated OCI, net of tax			10,883			(a)	36			(a)	176			(b)	11,095
Change in accumulated other comprehensive (loss) income, net of tax	(19,307)						36				176				(19,095)
Accumulated OCI (loss), net of tax, as of June 30, 2014	$				20,461		$	(1,060)			$	(15,512)			$	3,889
	Three Months Ended June 30, 2013
	Natural gas cash flow hedges, net of tax						Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of April 1, 2013	$			59,754			$		(1,240)		$		(36,932)		$		21,582
Gains recognized in accumulated OCI, net of tax	73,429					(a)	–				–				73,429
(Gains) losses reclassified from accumulated OCI, net of tax		(10,490)				(a)	36			(a)	436			(b)	(10,018)
Change in accumulated OCI, net of tax	62,939						36				436				63,411
Accumulated OCI (loss), net of tax, as of June 30, 2013	$			122,693			$		(1,204)		$		(36,496)		$		84,993

19

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Six Months Ended June 30, 2014
	Natural gas cash flow hedges, net of tax					Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2014	$			61,699		$	(1,132)			$	(15,864)			$	44,703
Losses recognized in accumulated OCI, net of tax	(52,649)				(a)	–				–				(52,649)
Gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets	(16,735)				(a)	–				–				(16,735)
Losses reclassified from accumulated OCI, net of tax		28,146			(a)	72			(a)	352			(b)	28,570
Change in accumulated other comprehensive (loss) income, net of tax	(41,238)					72				352				(40,814)
Accumulated OCI (loss), net of tax, as of June 30, 2014	$			20,461		$	(1,060)			$	(15,512)			$	3,889
	Six Months Ended June 30, 2013
	Natural gas cash flow hedges, net of tax					Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2013	$		138,188			$		(1,276)		$		(37,365)		$		99,547
Gains recognized in accumulated OCI, net of tax	20,828				(a)	–				–				20,828
(Gains) losses reclassified from accumulated OCI, net of tax		(36,323)			(a)	72			(a)	869			(b)	(35,382)
Change in accumulated other comprehensive (loss) income, net of tax	(15,495)					72				869				(14,554)
Accumulated OCI (loss), net of tax, as of June 30, 2013	$		122,693			$		(1,204)		$		(36,496)		$		84,993

(a)See Note E for additional information.

(b)  This accumulated OCI reclassification is attributable to the net actuarial loss and net prior service cost related to the Company’s defined benefit pension plans and other post-retirement benefit plans.  See Note 13 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for additional information.

20

EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

K.        Sale and Exchange of Properties

In April 2014, the Company executed an agreement to exchange certain assets with Range Resources Corporation (Range).  The transaction closed on June 16, 2014.  The Company received approximately 73,000 net acres and approximately 900 producing wells, most of which are vertical wells, in the Permian Basin of Texas. In exchange, Range received  approximately 138,000 net acres in the Company’s Nora field of Virginia (Nora), the Company’s working interest in approximately 2,000 producing vertical wells in Nora, the Company’s remaining 50% ownership interest in Nora Gathering, LLC (Nora LLC), which owns the supporting gathering system in Nora, and $157.3 million in cash, subject to certain post-closing purchase price adjustments.  The Company previously recorded its 50% ownership interest in Nora LLC as a nonconsolidated investment in its consolidated financial statements. Portions of the exchange of assets with Range are intended to qualify as a tax free asset exchange.

The fair value of the assets exchanged by the Company was approximately $510.3 million. The Company is in the process of finalizing the allocation between the acquired acreage and the acquired wells. The Company recorded a pre-tax gain of $37.7 million, which is included in gain on sale / exchange of assets in the Statements of Consolidated Income. The gain on sale / exchange of assets includes a $28.0 million pre-tax gain related to the de-designation of certain derivative instruments that were previously designated as cash flow hedges because it was probable that the forecasted transactions would not occur.

As the asset exchange qualifies as a business combination under United States GAAP, the fair value of the acquired assets was determined using a discounted cash flow model under the market approach. Significant unobservable inputs used in the analysis included the determination of estimated developed reserves, NYMEX forward pricing and comparable sales transactions, which classify the acquired assets as a Level 3 measurement.

L.        Recently Issued Accounting Standards

In April 2014, the Financial Accounting Standards Board (FASB) issued an accounting standards update (ASU) that raised the threshold for a disposal to qualify as a discontinued operation and requires new disclosures for both discontinued operations and certain other material disposal transactions that do not meet the revised definition of a discontinued operation. Under the updated standard, a disposal of a component or group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components of the entity (1) has been disposed of by a sale, (2) has been disposed of other than by sale or (3) is classified as held for sale. This ASU is effective for annual periods beginning on or after December 15, 2014 and is applied prospectively. Early adoption is permitted but only for disposals (or classifications that are held for sale) that have not been reported in financial statements previously issued or available for use. The Company adopted this new standard in the second quarter of 2014. The sale of Nora LLC discussed in Note K did not meet the definition of a discontinued operation and was not deemed an individually material disposal transaction.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU No. 2014-09 will replace most of the existing revenue recognition requirements in United States GAAP when it becomes effective. The guidance in ASU No. 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods therein.  Early adoption is not permitted.  The Company is currently evaluating the method of adoption and impact this standard will have on its financial statements and related disclosures.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENTS

Disclosures in this Quarterly Report on Form 10-Q contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended.  Statements that do not relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as “anticipate,” “estimate,” “could,” “would,” “will,” “may,” “forecast,” “approximate,” “expect,” “project,” “intend,” “plan,” “believe” and other words of similar meaning in connection with any discussion of future operating or financial matters.  Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the matters discussed in the section captioned “Outlook” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Company and its subsidiaries, including guidance regarding the Company’s strategy to develop its Marcellus and other reserves; drilling plans and programs (including the number, type, feet of pay and location of wells to be drilled and the availability of capital to complete these plans and programs); production sales volumes (including liquids volumes) and growth rates; the timing of the Company’s operational capacity on third-party pipelines; gathering and transmission volumes; infrastructure programs (including the timing, cost and capacity of the transmission and gathering expansion projects); the timing, cost and capacity of the Ohio Valley Connector (OVC) and Mountain Valley Pipeline (MVP) projects; the expected terms and structure of the proposed joint venture related to the MVP project, including the Company affiliate(s) to own and operate the MVP; technology (including drilling techniques); monetization transactions, including midstream asset sales (dropdowns) to EQT Midstream Partners, LP (the Partnership) and other asset sales, joint ventures or other transactions involving the Company’s assets; natural gas prices and changes in basis; reserves; projected capital expenditures; the amount and timing of any repurchases under the Company’s share repurchase authorization; liquidity and financing requirements, including funding sources and availability; hedging strategy; the effects of government regulation and litigation; and tax position (including the Company’s ability to complete like-kind exchanges).  The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results.  Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results.  The Company has based these forward-looking statements on current expectations and assumptions about future events.  While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control.  With respect to the proposed OVC and MVP projects, these risks and uncertainties include, among others, the ability to obtain regulatory permits and approvals, the ability to secure customer contracts, the availability of skilled labor, equipment and materials, and, with respect to the MVP project, the risk that the parties may not consummate the joint venture.  Additional risks and uncertainties that may affect the operations, performance and results of the Company’s business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as updated by Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

In reviewing any agreements incorporated by reference in or filed with this Quarterly Report on Form 10-Q, please remember such agreements are included to provide information regarding the terms of such agreements and are not intended to provide any other factual or disclosure information about the Company. The agreements may contain representations and warranties by the Company, which should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties to such agreements should those statements prove to be inaccurate. The representations and warranties were made only as of the date of the relevant agreement or such other date or dates as may be specified in such agreement and are subject to more recent developments.  Accordingly, these representations and warranties alone may not describe the actual state of affairs of the Company or its affiliates as of the date they were made or at any other time.

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CORPORATE OVERVIEW

Three Months Ended June 30, 2014 vs. Three Months Ended June 30, 2013

Income from continuing operations attributable to EQT Corporation for the three months ended June 30, 2014 was $109.0 million, $0.72 per diluted share, compared with $81.3 million, $0.54 per diluted share, for the three months ended June 30, 2013. The $27.7 million increase in income from continuing operations attributable to EQT Corporation between periods was primarily attributable to a $37.7 million pre-tax gain recognized on the sale / exchange of assets with Range Resources Corporation (Range), a lower production depletion rate, a 17% increase in natural gas and natural gas liquid (NGL) volumes sold and increases in contracted transmission capacity and gathered volumes. These factors were partially offset by a 10% decrease in the average effective sales price for natural gas and NGLs, higher income tax expense, higher net income attributable to noncontrolling interests and higher selling, general and administrative (SG&A) expenses.

The average effective sales price to EQT Corporation for production sales volumes was $3.85 per Mcfe for the three months ended June 30, 2014 compared to $4.29 per Mcfe for the three months ended June 30, 2013.  The $0.44 per Mcfe decrease in the average effective sales price was primarily due to lower Appalachian Basin basis partially offset by a favorable average New York Mercantile Exchange (NYMEX) natural gas price net of hedging impacts compared to the same period of 2013. The average NYMEX natural gas index price was $4.67 per MMBtu during the second quarter of 2014, 14% higher than the average index price of $4.09 per MMBtu during the second quarter of 2013.

Interest expense decreased $5.5 million during the three months ended June 30, 2014 compared to the three months ended June 30, 2013 primarily as a result of higher capitalized interest of $11.0 million on increased Marcellus well development in the second quarter of 2014 compared to $5.2 million in the second quarter of 2013.

Income tax expense increased $21.0 million during the three months ended June 30, 2014 compared to the three months ended June 30, 2013 as a result of higher pre-tax income. The Company’s effective income tax rate was 30.2% for the second quarter of 2014 compared to 30.1% for the second quarter of 2013. The overall rate was lower for both periods as the Company consolidates 100% of the pre-tax income related to the noncontrolling public limited partners’ share of partnership earnings, but does not record an income tax provision with respect to the portion of the Partnership’s earnings allocated to its noncontrolling public limited partners.

Income from discontinued operations, net of tax, was $1.9 million for the three months ended June 30, 2014 compared to income from discontinued operations, net of tax, of $5.6 million for the three months ended June 30, 2013. On December 17, 2013, the Company and its wholly-owned subsidiary, Distribution Holdco, LLC (Holdco), transferred 100% of their ownership interests in Equitable Gas Company, LLC (Equitable Gas) and Equitable Homeworks, LLC (Homeworks) to PNG Companies LLC (PNG Companies).

Net income attributable to noncontrolling interests of the Partnership was $27.3 million for the three months ended June 30, 2014 compared to $7.3 million for the three months ended June 30, 2013. The $20.0 million increase was a result of increased noncontrolling interests and higher capacity reservation revenues in the Partnership. The Partnership completed underwritten public offerings of additional common units representing limited partner interests in the Partnership in May 2014 (in connection with the Jupiter Transaction described in Note C to the Condensed Consolidated Financial Statements) and in July 2013.

Six Months Ended June 30, 2014 vs. Six Months Ended June 30, 2013

Income from continuing operations attributable to EQT Corporation for the six months ended June 30, 2014 was $301.3 million, $1.98 per diluted share, compared with $146.5 million, $0.97 per diluted share, for the six months ended June 30, 2013. The $154.8 million increase in income from continuing operations attributable to EQT Corporation between periods was primarily attributable to a 9% higher average effective sales price for natural gas and NGLs, a lower production depletion rate, a 23% increase in natural gas and NGL volumes sold, a $37.7 million pre-tax gain recognized on the sale / exchange of assets with Range and increases in contracted transmission capacity and gathered volumes. These factors were partially offset by higher net income attributable to noncontrolling interests, higher SG&A expenses and higher income tax expense.

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The average effective sales price to EQT Corporation for production sales volumes was $4.59 per Mcfe for the six months ended June 30, 2014 compared to $4.23 per Mcfe for the six months ended June 30, 2013. The $0.36 per Mcfe increase in the average effective sales price was primarily due to an increase in the average NYMEX natural gas price net of hedging impacts and a $0.34 per Mcfe increase in third-party gathering and transmission recoveries from the utilization of existing and new third-party transportation capacity to reach higher priced markets during the unusually cold winter in the first quarter of 2014, partially offset by lower Appalachian Basin basis compared to the same period of 2013. The average NYMEX natural gas index price averaged $4.80 per MMBtu during the first half of 2014, 29% higher than the average index price of $3.71 per MMBtu during the first half of 2013.

Interest expense decreased $11.3 million during the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily as a result of higher capitalized interest of $21.1 million on increased Marcellus well development in the first half of 2014 compared to $10.1 million in the first half of 2013.

Income tax expense increased $102.6 million in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily as a result of higher pre-tax income as well as a higher effective tax rate. The Company’s effective income tax rate increased to 33.6% from 30.9%.  The increase in the effective income tax rate from the first half of 2013 is primarily attributable to an increase in state tax due to increased earnings in states with higher tax rates as well as increased tax reserves recorded in certain states in 2014, and a reduction in a valuation allowance related to bonus depreciation for state tax purposes in 2013, partially offset by the impact of the Partnership’s ownership structure.  The overall rate was lower for both periods as the Company consolidates 100% of the pre-tax income related to the noncontrolling public limited partners’ share of partnership earnings, but does not record an income tax provision with respect to the portion of the Partnership’s earnings allocated to its noncontrolling public limited partners.

Income from discontinued operations, net of tax, was $1.8 million for the six months ended June 30, 2014 compared to income from discontinued operations, net of tax, of $40.6 million for the six months ended June 30, 2013. On December 17, 2013, the Company and its wholly-owned subsidiary Holdco transferred 100% of their ownership interests in Equitable Gas and Homeworks to PNG Companies.

Net income attributable to noncontrolling interests of the Partnership was $46.1 million for the six months ended June 30, 2014 compared to $16.3 million for the six months ended June 30, 2013. The $29.8 million increase was a result of increased noncontrolling interests and higher capacity reservation revenues in the Partnership. The Partnership completed underwritten public offerings of additional common units representing limited partner interests in the Partnership in May 2014 (in connection with the Jupiter Transaction described in Note C to the Condensed Consolidated Financial Statements) and in July 2013.

See “Investing Activities” under the caption “Capital Resources and Liquidity” for a discussion of capital expenditures.

Consolidated Operational Data

Revenues earned by the Company at the wellhead from the sale of natural gas are split between EQT Production and EQT Midstream. The split is reflected in the calculation of EQT Production’s average effective sales price.  The following operational information presents detailed gross liquid and natural gas operational information as well as midstream deductions to assist in the understanding of the Company’s consolidated operations.

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	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013		%	2014		2013		%
in thousands (unless noted)
LIQUIDS
NGLs:
Sales Volume (MMcfe) (a)	7,954		6,931		14.8	15,721		13,623		15.4
Sales Volume (Mbbls)	1,326		1,155		14.8	2,620		2,270		15.4
Gross Price ($/Bbl)	$	43.78	$	42.65	2.6	$	49.67	$	44.35	12.0
Gross NGL Revenue	$	58,034	$	49,260	17.8	$	130,148	$	100,683	29.3
Oil:
Sales Volume (MMcfe) (a)	395		327		20.8	699		695		0.6
Sales Volume (Mbbls)	66		54		22.2	116		116		–
Net Price ($/Bbl)	$	89.75	$	83.95	6.9	$	86.85	$	82.55	5.2
Net Oil Revenue	$	5,903	$	4,575	29.0	$	10,117	$	9,561	5.8
Total Liquids Revenue	$	63,937	$	53,835	18.8	$	140,265	$	110,244	27.2
GAS
Sales Volume – Natural Gas (MMBtu)	101,788		87,226		16.7	199,839		161,880		23.4
Sales Volume – Ethane sold as natural gas (MMBtu)	8,234		6,962		18.3	15,165		13,379		13.3
Sales Volume (MMBtu)	110,022		94,188		16.8	215,004		175,259		22.7
NYMEX Price ($/MMBtu) (b)	$	4.67	$	4.09	14.2	$	4.79	$	3.74	28.1
Gas Revenue	$	513,359	$	385,417	33.2	$	1,029,995	$	655,843	57.0
Basis	(85,701)		(1,576)		5,337.9	(109,370)		(3,118)		3,407.7
Gross Gas Revenue (unhedged)	$	427,658	$	383,841	11.4	$	920,625	$	652,725	41.0
Sales Volume (MMcf)	101,788		87,226		16.7	199,839		161,880		23.4
Gas Price ($/Mcf) (unhedged)	$	4.20	$	4.40	(4.5)	$	4.61	$	4.03	14.4
Total Gross Gas & Liquids Revenue (unhedged)	$	491,595	$	437,676	12.3	$	1,060,890	$	762,969	39.0
Hedge impact	(14,838)		9,728		(252.5)	(67,101)		53,226		(226.1)
Total Gross Gas & Liquids Revenue	$	476,757	$	447,404	6.6	$	993,789	$	816,195	21.8
Total Sales Volume (MMcfe)	110,136		94,483		16.6	216,259		176,198		22.7
Average hedge adjusted price ($/Mcfe)	$	4.33	$	4.74	(8.6)	$	4.60	$	4.63	(0.6)
Midstream Revenue Deductions ($ / Mcfe)
Gathering to EQT Midstream	$	(0.74)	$	(0.81)	(8.6)	$	(0.74)	$	(0.84)	(11.9)
Transmission to EQT Midstream	(0.19)		(0.24)		(20.8)	(0.20)		(0.23)		(13.0)
Third-party gathering and transmission	(0.54)		(0.59)		(8.5)	(0.54)		(0.61)		(11.5)
Third-party gathering and transmission recoveries, net	0.20		0.25		(20.0)	0.66		0.32		106.3
Third-party processing	(0.14)		(0.11)		27.3	(0.13)		(0.11)		18.2
Total midstream revenue deductions	(1.41)		(1.50)		(6.0)	(0.95)		(1.47)		(35.4)
Average effective sales price to EQT Production	$	2.92	$	3.24	(9.9)	$	3.65	$	3.16	15.5
EQT Revenue ($ / Mcfe)
Revenues to EQT Midstream	$	0.93	$	1.05	(11.4)	$	0.94	$	1.07	(12.1)
Revenues to EQT Production	2.92		3.24		(9.9)	3.65		3.16		15.5
Average effective sales price to EQT Corporation	$	3.85	$	4.29	(10.3)	$	4.59	$	4.23	8.5

(a) NGLs and crude oil were converted to Mcfe at the rate of six Mcfe per barrel for all periods. Information for the three and six months ended June 30, 2013 has been recast to reflect this conversion rate.

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(b) The Company’s volume weighted NYMEX natural gas price (actual average NYMEX natural gas price ($/MMBtu) was $4.67 and $4.09 for the three months ended June 30, 2014 and 2013, respectively, and $4.80 and $3.71 for the six months ended June 30, 2014 and 2013, respectively).

Business Segment Results of Operations

The Company has reported the components of each segment’s operating income from continuing operations and various operational measures in the sections below and, where appropriate, has provided information describing how a measure was derived. EQT’s management believes that presentation of this information provides useful information to management and investors regarding the financial condition, operations and trends of each of EQT’s business segments without being obscured by the financial condition, operations and trends for the other segments or by the effects of corporate allocations of interest, income taxes and other income.  In addition, management uses these measures for budget planning purposes. The Company’s management reviews and reports the EQT Production segment results for operating revenues and transportation and processing costs with transportation and processing costs reflected as a deduction from operating revenues as management believes this presentation provides a more useful view of net effective sales price and is consistent with industry practices. Third-party costs incurred to gather, process and transport gas produced by EQT Production to market sales points are reported as a component of transportation and processing costs in the consolidated results. Purchased gas costs at EQT Midstream include natural gas purchases, including natural gas purchases from affiliates, purchased gas cost adjustments and other gas supply expenses. These purchased gas costs are primarily with affiliates and are eliminated in consolidation. Consistent with the consolidated results, energy trading contracts recorded within storage, marketing and other are reported net within operating revenues, regardless of whether the contracts are physically or financially settled. The Company has reconciled each segment’s operating income to the Company’s consolidated operating income and net income in Note D to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

EQT PRODUCTION

RESULTS OF OPERATIONS

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013		%	2014		2013		%
OPERATIONAL DATA
Sales volume detail (MMcfe):
Horizontal Marcellus Play (a)	85,848		68,882		24.6	168,974		124,334		35.9
Horizontal Huron Play	7,859		8,743		(10.1)	14,978		18,156		(17.5)
CBM Play	2,592		3,116		(16.8)	5,506		6,232		(11.6)
Other	13,837		13,743		0.7	26,801		27,476		(2.5)
Total production sales volumes (b)	110,136		94,484		16.6	216,259		176,198		22.7
Average daily sales volumes (MMcfe/d)	1,210		1,038		16.6	1,195		973		22.8
Average effective sales price to EQT
Production ($/Mcfe)	$	2.92	$	3.24	(9.9)	$	3.65	$	3.16	15.5
Lease operating expenses (LOE), excluding
production taxes ($/Mcfe)	$	0.14	$	0.15	(6.7)	$	0.14	$	0.16	(12.5)
Production taxes ($/Mcfe)	$	0.15	$	0.14	7.1	$	0.15	$	0.14	7.1
Production depletion ($/Mcfe)	$	1.21	$	1.50	(19.3)	$	1.21	$	1.50	(19.3)
Depreciation, depletion and amortization (DD&A) (thousands):
Production depletion	$	133,661	$	141,661	(5.6)	$	262,218	$	264,152	(0.7)
Other DD&A	2,590		2,412		7.4	5,272		4,830		9.2
Total DD&A (thousands)	$	136,251	$	144,073	(5.4)	$	267,490	$	268,982	(0.6)
Capital expenditures (thousands) (c)	$	930,228	$	394,391	135.9	$	1,338,559	$	637,566	109.9
FINANCIAL DATA (thousands)
Total net operating revenues	$	322,100	$	306,132	5.2	$	789,845	$	556,643	41.9
Operating expenses:
LOE, excluding production taxes	15,513		14,612		6.2	30,360		27,651		9.8
Production taxes	16,369		13,134		24.6	33,462		24,985		33.9
Exploration expense	7,439		6,138		21.2	8,851		9,868		(10.3)
SG&A	32,825		23,119		42.0	58,774		46,004		27.8
DD&A	136,251		144,073		(5.4)	267,490		268,982		(0.6)
Total operating expenses	208,397		201,076		3.6	398,937		377,490		5.7
Gain on sale / exchange of assets	30,986		–		100.0	30,986		–		100.0
Operating income	$	144,689	$	105,056	37.7	$	421,894	$	179,153	135.5

(a)	Includes Upper Devonian wells.
(b)	NGLs and crude oil were converted to Mcfe at the rate of six Mcfe per barrel for all periods. Information for the three and six months ended June 30, 2013 has been recast to reflect this conversion rate.
(c)	Includes $157.3 million of cash capital expenditures and $353.0 million of non-cash capital expenditures for the exchange of assets with Range during the three and six months ended June 30, 2014 and $112.5 million of capital expenditures for the purchase of acreage and Marcellus wells from Chesapeake Energy Corporation and its partners during the three and six months ended June 30, 2013.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Three Months Ended June 30, 2014 vs. Three Months Ended June 30, 2013

EQT Production’s operating income totaled $144.7 million for the three months ended June 30, 2014 compared to $105.1 million for the three months ended June 30, 2013.  The $39.6 million increase in operating income was primarily due to increased sales of produced natural gas and NGLs and a gain on the exchange of assets partially offset by a lower average effective sale price and an increase in operating expenses.

Total net operating revenues were $322.1 million for the three months ended June 30, 2014 compared to $306.1 million for the three months ended June 30, 2013.  The $16.0 million increase in operating revenues was primarily due to a 17% increase in production sales volumes partially offset by a 10% decrease in the average effective sales price to EQT Production. The increase in production sales volumes was the result of increased production from the 2012 and 2013 drilling programs, primarily in the Marcellus play. This increase was partially offset by the normal production decline in the Company’s producing wells.

The $0.32 per Mcfe decrease in the average effective sales price to EQT Production was primarily due to lower Appalachian Basin basis partly offset by an increase in the average NYMEX natural gas price net of hedging impacts and lower per unit midstream charges related to EQT Midstream compared to the same period of 2013.

Total net operating revenues for the second quarter of 2014 included a $1.0 million gain for hedging ineffectiveness of financial hedges compared to a $7.5 million loss in the second quarter of 2013. The second quarter of 2014 also included $8.7 million of derivative losses for derivative instruments not designated as hedging instruments compared to $0.4 million of derivative gains for the same period of 2013.  The losses in the second quarter of 2014 primarily relate to changes in fair market value of basis swaps.

As discussed in Note K to the Company’s Condensed Consolidated Financial Statements, in connection with an asset exchange with Range during the second quarter of 2014, the Company received acreage and producing wells in the Permian Basin of Texas in exchange for acreage, producing wells, the Company’s 50% ownership interest in a supporting gathering system in the Nora field of Virginia and cash of $157.3 million. In conjunction with this transaction, EQT Production recognized a pre-tax gain of $31.0 million in 2014, which is included in gain on sale / exchange of assets in the Statements of Consolidated Income.  The $31.0 million pre-tax gain includes a $28.0 million pre-tax gain related to the de-designation of certain derivative instruments that were previously designated as cash flow hedges because it was probable that the forecasted transactions would not occur. Any subsequent changes in fair value of these derivative instruments are recognized within the results of operations for EQT Production.

Operating expenses totaled $208.4 million for the three months ended June 30, 2014 compared to $201.1 million for the three months ended June 30, 2013. The increase in operating expenses was the result of increases in SG&A, production taxes, exploration expense and LOE partially offset by a decrease in DD&A.  SG&A expense increased in the second quarter of 2014 compared to the second quarter of 2013 primarily as a result of higher personnel costs of $3.2 million, including incentive compensation costs, and higher reserves for litigation and environmental remediation. The increase in production taxes was primarily due to a $2.3 million increase in severance taxes due to higher market sales prices and higher production sales volumes in certain jurisdictions subject to these taxes.  Production taxes also increased in the second quarter of 2014 compared to the second quarter of 2013 due to a $1.3 million increase in the Pennsylvania impact fee, primarily as a result of an increase in the number of wells drilled in Pennsylvania. The increase in exploration expense was due to increased impairments of unproved lease acreage resulting from more lease expirations during the second quarter of 2014 compared to the second quarter of 2013. The increase in LOE was mainly due to increased Marcellus activity. The decrease in DD&A expense was the result of a lower overall depletion rate partially offset by higher produced volumes in the current year.

Six Months Ended June 30, 2014 vs. Six Months Ended June 30, 2013

EQT Production’s operating income totaled $421.9 million for the six months ended June 30, 2014 compared to $179.2 million for the six months ended June 30, 2013. The $242.7 million increase in operating income was primarily due to an increase in sales of produced natural gas and NGLs, a higher average effective sale price and a gain on the exchange of assets partially offset by an increase in operating expenses.

Total net operating revenues were $789.8 million for the six months ended June 30, 2014 compared to $556.6 million for the six months ended June 30, 2013.  The $233.2 million increase in operating revenues was primarily due to a 23% increase in production sales volumes and a 16% increase in the average effective sales price to EQT

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Production. The increase in production sales volumes was the result of increased production from the 2012 and 2013 drilling programs, primarily in the Marcellus play. This increase was partially offset by the normal production decline in the Company’s producing wells.

The $0.49 per Mcfe increase in the average effective sales price to EQT Production was the net result of an increase in the average NYMEX natural gas price net of hedging impacts combined with a $0.34 per Mcfe increase in third-party gathering and transmission recoveries from the utilization of existing and new third-party transportation capacity to reach higher priced markets, partly offset by lower Appalachian Basin basis compared to the first half of 2013. Third-party gathering and transmission recoveries, net represent differences in natural gas prices between the Appalachian Basin and the sales points of other markets reached by utilizing this capacity, differences in natural gas prices between the Appalachian Basin and fixed price sales contracts and other marketing activity, including capacity releases. For the six months ended June 30, 2014, EQT Production recognized higher recoveries compared to the same period in 2013 primarily by using its capacity to sell gas in higher priced markets, particularly in the first quarter of 2014 when the weather was unusually cold and market prices in the United States Northeast region were significantly higher than the Appalachian Basin prices. Much of these higher revenues resulted from sales off of the Company’s Texas Eastern Transmission (TETCO) and Tennessee Gas Pipeline capacity, including additional TETCO capacity which the Company acquired effective February 2014.  This new capacity of 245,000 MMBtu per day enables the Company to reach markets in eastern Pennsylvania.

Total net operating revenues for the six months ended June 30, 2014 included a $21.3 million loss for hedging ineffectiveness of financial hedges compared to an $8.0 million loss for ineffectiveness of financial hedges in the six months ended June 30, 2013. This ineffectiveness was caused by the change in Appalachian basis since inception of the hedges. The six months ended June 30, 2014 also included $13.9 million of derivative losses for derivative instruments not designated as hedging instruments compared to $0.7 million of derivative gains for the same period of 2013.  The losses for the six months ended June 30, 2014 primarily relate to unfavorable settlements and changes in fair market value of basis swaps.

Operating expenses totaled $398.9 million for the six months ended June 30, 2014 compared to $377.5 million for the six months ended June 30, 2013.  The increase in operating expenses was the result of increases in SG&A, production taxes, and LOE partially offset by decreases in exploration expense and DD&A. SG&A expense increased in the first half of 2014 compared to the first half of 2013, primarily as a result of higher personnel costs of $6.8 million, including incentive compensation costs, a higher reserve for litigation and a higher allowance for doubtful accounts of $1.5 million, partially offset by lower environmental reserves for remediation.  Production taxes increased primarily due to a $6.0 million increase in severance taxes due to higher market sales prices and higher production sales volumes in certain jurisdictions subject to these taxes.  Production taxes also increased due to a $2.5 million increase in the Pennsylvania impact fee, primarily as a result of an increase in the number of wells drilled in Pennsylvania. The increase in LOE was mainly due to increased Marcellus activity. The decrease in exploration expense was due to decreased impairments of unproved lease acreage of $1.7 million resulting from fewer lease expirations during the first half of 2014 compared to the first half of 2013. DD&A expense decreased as a result of a lower overall depletion rate partially offset by higher produced volumes in the current year.

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EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

EQT MIDSTREAM

RESULTS OF OPERATIONS

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013		%	2014		2013		%
OPERATIONAL DATA
Gathered volumes (BBtu)	135,794		116,132		16.9	261,958		217,363		20.5
Average gathering fee ($/MMBtu)	$	0.67	$	0.75	(10.7)	$	0.69	$	0.78	(11.5)
Gathering and compression expense ($/MMBtu)	$	0.16	$	0.17	(5.9)	$	0.16	$	0.18	(11.1)
Transmission pipeline throughput (BBtu)	152,519		104,846		45.5	296,881		185,817		59.8
Net operating revenues (thousands):
Gathering	$	91,204	$	86,992	4.8	$	180,580	$	168,806	7.0
Transmission	51,520		38,836		32.7	103,629		76,143		36.1
Storage, marketing and other	9,620		5,502		74.8	16,840		15,261		10.3
Total net operating revenues	$	152,344	$	131,330	16.0	$	301,049	$	260,210	15.7
Capital expenditures (thousands)	$	110,913	$	89,060	24.5	$	194,126	$	138,204	40.5
FINANCIAL DATA (thousands)
Total operating revenues	$	162,345	$	150,366	8.0	$	328,571	$	297,054	10.6
Purchased gas costs	10,001		19,036		(47.5)	27,522		36,844		(25.3)
Total net operating revenues	152,344		131,330		16.0	301,049		260,210		15.7
Operating expenses:
Operating and maintenance (O&M)	27,444		23,936		14.7	52,598		46,609		12.8
SG&A	22,006		16,696		31.8	41,479		30,470		36.1
DD&A	21,130		18,452		14.5	42,139		36,671		14.9
Total operating expenses	70,580		59,084		19.5	136,216		113,750		19.8
Gain on sale / exchange of assets (a)	6,763		–		100.0	6,763		–		100.0
Operating income	$	88,527	$	72,246	22.5	$	171,596	$	146,460	17.2

(a)As discussed in Note K to the Company’s Condensed Consolidated Financial Statements, in connection with an asset exchange with Range during the second quarter of 2014, the Company received acreage and producing wells in the Permian Basin of Texas in exchange for acreage, producing wells, the Company’s 50% ownership interest in a supporting gathering system in the Nora field of Virginia and cash of $157.3 million. In conjunction with this transaction, EQT Midstream recognized a pre-tax gain of $6.8 million, which is included in gain on sale / exchange of assets in the Statements of Consolidated Income.

Three Months Ended June 30, 2014 vs. Three Months Ended June 30, 2013

EQT Midstream’s operating income totaled $88.5 million for the three months ended June 30, 2014 compared to $72.2 million for the three months ended June 30, 2013. The increase in operating income was primarily the result of increased transmission and gathering net operating revenues, a gain on the sale / exchange of assets and increased storage, marketing and other net operating revenues partly offset by increased operating expenses.

Gathering net operating revenues increased due to a 17% increase in gathered volumes, partially offset by an 11% decrease in the average gathering fee.  The gathered volume increase was driven by higher volumes gathered for EQT Production in the Marcellus play.  The average gathering fee decreased due to the mix of gathered volumes as Marcellus volumes increased at a lower average fee while Huron and other volumes, which have a higher gathering fee, decreased.

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EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Transmission net operating revenues increased by $12.7 million as a result of higher third party and affiliate firm transmission contracted capacity of $11.9 million, including $2.5 million related to the Allegheny Valley Connector (AVC) facilities, and higher interruptible transmission service. The AVC facilities were acquired in the Equitable Gas Transaction (as defined and described in Note B to the Company’s Condensed Consolidated Financial Statements). The increase in transmission revenue is the result of increased production development in the Marcellus Shale.

Storage, marketing and other net operating revenues increased from the prior year primarily as a result of the storage revenues on the AVC facilities.

Operating expenses totaled $70.6 million for the three months ended June 30, 2014 compared to $59.1 million for the three months ended June 30, 2013. O&M expense increased $3.5 million as a result of higher personnel costs of $1.5 million and higher compressor operating expenses of $1.4 million related to the increase in Marcellus activity. SG&A expense increased $5.3 million, primarily due to higher personnel costs of $3.5 million including incentive compensation costs, $0.7 million of increased allocated expenses from affiliates, increased professional services of $0.4 million and increased franchise taxes of $0.4 million. DD&A increased $2.7 million as a result of additional assets placed in-service, including the AVC.

Total operating revenues increased $12.0 million primarily as a result of increased transmission revenues and increased gathered volumes partially offset by reduced total operating revenues for storage, marketing and other. Purchased gas costs decreased $9.0 million primarily as a result of reduced commercial activity.

Six Months Ended June 30, 2014 vs. Six Months Ended June 30, 2013

EQT Midstream’s operating income totaled $171.6 million for the six months ended June 30, 2014 compared to $146.5 million for the six months ended June 30, 2013. The increase in operating income was primarily the result of increased transmission and gathering net operating revenues and a gain on the sale / exchange of assets partly offset by increased operating expenses.

Gathering net operating revenues increased due to a 21% increase in gathered volumes, partially offset by a 12% decrease in the average gathering fee.  The gathered volume increase was driven by higher volumes gathered for EQT Production in the Marcellus play.  The average gathering fee decreased due to the mix of gathered volumes as Marcellus volumes increased at a lower average fee while Huron and other volumes, which have a higher gathering fee, decreased.

Transmission net operating revenues increased by $27.5 million as a result of higher third party and affiliate firm transmission contracted capacity of $26.7 million, including $7.7 million related to the AVC facilities, and higher interruptible transmission service. The increase in transmission revenue is the result of increased production development in the Marcellus Shale.

Storage, marketing and other net operating revenues increased from the prior year primarily due to increased storage revenues on the AVC, which was acquired in the Equitable Gas Transaction, partially offset by lower revenues on NGLs marketed for non-affiliated producers and reduced marketing revenues a result of the sale of certain energy marketing contracts on December 31, 2013.

Operating expenses totaled $136.2 million for the six months ended June 30, 2014 compared to $113.8 million for the six months ended June 30, 2013. O&M expense increased $6.0 million as a result of $3.6 million of higher compressor operating expenses related to an increase in Marcellus activity and additional compressors on the AVC and higher personnel costs of $2.6 million. SG&A expense increased $11.0 million primarily due to higher personnel costs of $6.4 million, including incentive compensation costs and increased allocated expenses from affiliates of $1.5 million. DD&A increased $5.5 million as a result of additional assets placed in-service, including the AVC.

Total operating revenues increased $31.5 million primarily as a result of increased transmission revenues and increased gathered volumes offset by reduced total operating revenues for storage, marketing and other. Purchased gas costs decreased $9.3 million primarily as a result of reduced commercial activity.

31

EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

OUTLOOK

The Company is committed to profitably developing its natural gas, NGL and oil reserves through environmentally responsible, cost-effective and technologically advanced horizontal drilling.  The market price for natural gas can be volatile and these fluctuations can impact the Company’s revenues, earnings and liquidity.  Due to the increased supply of natural gas in the Appalachian Basin, price differential at regional sales points in the basin have been negative relative to Henry Hub since mid-2013. While the Company is unable to predict future movements in the market price for natural gas, the Company expects this trend in Appalachian basis to continue.

On July 24, 2014, the Partnership announced that it will construct and own the Ohio Valley Connector (OVC) pipeline, which will be regulated by the Federal Energy Regulatory Commission (FERC). OVC will connect the Partnership’s transmission and storage system in northern West Virginia to Clarington, Ohio. At Clarington, OVC will interconnect with the Rockies Express Pipeline and the Texas Eastern Pipeline. In addition to providing Marcellus producers access to pipelines serving Midwest and Gulf Coast markets, OVC will provide Utica producers, located along the route, direct access to the Partnership’s extensive transmission system and is expected to be in-service by mid-year 2016. Subject to FERC approval, the 36 mile pipeline extension will provide approximately 1.0 Bcf per day of transmission capacity and is estimated to cost $300 million.  The Partnership has entered into a 20-year precedent agreement with EQT for a total of 650 MMcf per day of firm transmission capacity on OVC.

On July 10, 2014, EQT completed a non-binding open season for the proposed FERC regulated Mountain Valley Pipeline project. The open season resulted in significant interest from many potential shippers. EQT is working toward binding precedent agreements with shippers and expects to have an update on the project within the next several months.   EQT currently expects the 330-mile project, which is subject to Board and FERC approval, to extend from the Partnership’s transmission and storage system in West Virginia to southern Virginia, to provide approximately two billion cubic feet per day of firm transmission capacity and to be in-service by the end of 2018.  The pipeline is expected to be constructed and owned by a joint venture between EQT or the Partnership and NextEra Energy, Inc.

Total capital investment, excluding acquisitions, is expected to be approximately $2.4 billion in 2014. Capital investment for well development (primarily drilling) in 2014 is expected to be approximately $1.8 billion to support the drilling of approximately 361 gross wells, including 201 Marcellus wells, 120 Huron wells, 36 Upper Devonian wells and 4 Permian Basin wells. The Company will complete and evaluate 5 Utica wells drilled in 2013, but has decided to delay further drilling on its Ohio Utica acreage until after this year. Estimated sales volumes are expected to be 465 — 480 Bcfe for an anticipated production sales volume growth of approximately 25% in 2014, while NGL volumes are expected to be 6,500 — 6,600 Mbbls. To support continued growth in production, the Company plans to invest approximately $0.6 billion on midstream infrastructure in 2014, and expects to add approximately 440 MMcf per day of incremental gathering capacity and approximately 750 MMcf per day of transmission capacity.  The 2014 capital spending plan is expected to be funded by cash on hand, cash flow generated from operations and proceeds from equity and debt issuances by the Partnership.

The Company continues to focus on creating and maximizing shareholder value through the implementation of a strategy that economically accelerates the monetization of its asset base and prudently pursues investment opportunities, all while maintaining a strong balance sheet with solid cash flow.  While the tactics continue to evolve based on market conditions, the Company is considering arrangements, including asset sales and joint ventures, to monetize the value of certain mature assets for re-deployment into its highest value development opportunities.  In addition, EQT is evaluating options to realize the value of its general partner stake in the Partnership. The Company expects to decide its course of action by the end of 2014.

CAPITAL RESOURCES AND LIQUIDITY

Overview

The Company’s primary sources of cash for the six months ended June 30, 2014 were proceeds from the underwritten public offering of the Partnership’s common units, borrowings under the Partnership’s revolving credit facility and cash flows from operating activities, while the primary use of cash was for capital expenditures.

32

EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Operating Activities

Net cash flows provided by operating activities totaled $794.6 million for the six months ended June 30, 2014 compared to $597.0 million for the six months ended June 30, 2013.  The $197.6 million increase in operating activities was primarily the result of a 23% increase in natural gas and NGL volumes sold, a 9% higher average effective sales price to EQT and increases in contracted transmission capacity and gathered volumes, partially offset by higher income tax payments and higher operating expenses.

Investing Activities

Net cash flows used in investing activities totaled $1,516.3 million for the first half of 2014 compared to $793.2 million for the first half of 2013. The $723.1 million increase was attributable to an increase of $387.9 million in cash capital expenditures, including cash paid as part of the asset exchange with Range, and an increase in restricted cash of $342.7 million in the first half of 2014 compared to 2013. During 2014, the Company placed $500.0 million of the proceeds received from the Partnership’s underwritten public offering in connection with the Jupiter Transaction into restricted cash for the use of the funds in a potential like-kind exchange for certain identified assets within a statutory time period. The Company used $157.3 million of the restricted cash in connection with the exchange of assets with Range, as discussed in Note K to the Company’s Condensed Consolidated Financial Statements.

Capital expenditures for EQT Production totaled $1,338.6 million for the six months ended June 30, 2014 compared to $637.6 million for the six months ended June 30, 2013. The $701.0 million increase in capital expenditures was primarily the result of an increase in property acquisitions and well development. Property acquisitions included $510.3 million of properties acquired as part of the asset exchange with Range, of which $353.0 million were non-cash capital expenditures. The increase in well development was driven by an increase in completed frac stages, an increase in wells spud and higher spending in the Huron play. The Company spud 153 gross wells in the first half of 2014, including 116 horizontal Marcellus and Upper Devonian wells, 36 horizontal Huron wells and 1 horizontal Permian Basin well. The Company spud 90 gross wells in the first half of 2013, including 88 horizontal Marcellus and Upper Devonian wells and 2 horizontal Utica wells.

Capital expenditures for EQT Midstream totaled $194.1 million for the first six months of 2014 compared to $138.2 million for the first six months of 2013.  The $55.9 million increase was primarily due to an increase in expenditures relating to gathering compression projects and land acquisitions.

Financing Activities

Cash flows provided by financing activities totaled $1,150.3 million for the six months ended June 30, 2014 compared to cash flows provided by financing activities of $30.8 million for the six months ended June 30, 2013, an increase of $1,119.5 million between periods. The Company received net proceeds of $902.5 million from the Partnership’s underwritten public offering of common units, received net proceeds from short-term loans of $330 million, paid distributions to noncontrolling interests of $25.7 million and used $32.4 million to repurchase and retire shares of the Company’s common stock during the six months ended June 30, 2014. The Company also paid $48.8 million for income tax withholdings related to the vesting of equity awards. As a part of a net settlement option, employees are able to elect to surrender a certain number of shares and in exchange, the Company assumes the income tax withholding obligations related to the vesting. The Company received net proceeds from short-term loans of $55.0 million, repaid maturing long-term debt of $20.2 million and paid distributions to noncontrolling interests of $10.4 million during the six months ended June 30, 2013.

On April 30, 2014, the Company’s Board of Directors approved a share repurchase authorization of up to 1,000,000 shares of the Company’s outstanding common stock.  The Company may repurchase shares from time to time in open market or in privately negotiated transactions.  The share repurchase authorization does not obligate the Company to acquire any specific number of shares, has no pre-established end date and may be discontinued by the Company at any time.  During the second quarter of 2014, the Company repurchased and retired 300,000 shares of common stock for $32.4 million under the authorization.

33

EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Security Ratings and Financing Triggers

The table below reflects the credit ratings for debt instruments of the Company at June 30, 2014.  Changes in credit ratings may affect the Company’s cost of short-term and long-term debt (including interest rates and fees under its lines of credit), collateral requirements under derivative instruments and access to the credit markets.

Rating Service	Senior Notes	Outlook
Moody’s Investors Service	Baa3	Stable
Standard & Poor’s Ratings Services	BBB	Stable
Fitch Ratings	BBB-	Stable

The Company’s credit ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.  The Company cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn entirely by a credit rating agency if, in its judgment, circumstances so warrant. If the credit rating agencies downgrade the Company’s ratings, particularly below investment grade, the Company’s access to the capital markets may be limited, borrowing costs and margin deposits on derivative contracts would increase, counterparties may request additional assurances and the potential pool of investors and funding sources may decrease.  The required margin on derivative instruments is also subject to significant change as a result of factors other than credit rating, such as natural gas prices and credit thresholds set forth in agreements between the hedging counterparties and the Company.

The Company’s debt agreements and other financial obligations contain various provisions that, if not complied with, could result in termination of the agreements, require early payment of amounts outstanding or similar actions.  The most significant covenants and events of default under the debt agreements relate to maintenance of a debt-to-total capitalization ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions.  The Company’s credit facility contains financial covenants that require a total debt-to-total capitalization ratio of no greater than 65%.  The calculation of this ratio excludes the effects of accumulated other comprehensive income. As of June 30, 2014, the Company was in compliance with all debt provisions and covenants.

The Partnership’s credit facility contains various provisions that, if not complied with, could result in termination of the credit facility, require early payment of amounts outstanding or similar actions.  The most significant covenants and events of default under the credit facility relate to maintenance of permitted leverage ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions.  Under the credit facility, the Partnership is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or, after the Partnership obtains an investment grade rating, not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions).  As of June 30, 2014, the Partnership was in compliance with all credit facility provisions and covenants.

Commodity Risk Management

The substantial majority of the Company’s commodity risk management program is related to hedging sales of the Company’s produced natural gas.  The Company’s overall objective in this hedging program is to protect cash flow from undue exposure to the risk of changing commodity prices. The Company’s risk management program may include the use of exchange-traded natural gas futures contracts and options and over the counter (OTC) natural gas swap agreements and options (collectively, derivative commodity instruments) to hedge exposures to fluctuations in natural gas prices.  The derivative commodity instruments currently utilized by the Company are primarily NYMEX swaps, collars and futures. The Company also enters into fixed price natural gas sales agreements that are satisfied by physical delivery. The Company’s fixed price natural gas sales agreements include contracts that fix only the NYMEX portion of the price and contracts that fix NYMEX and basis.

34

EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of July 23, 2014, the approximate volumes and prices of the Company’s total hedge position through December 2016 were:

	2014 (b)		2015		2016 (c)
NYMEX swaps and fixed price sales
Total Volume (Bcf)	114		138		64
Average Price per Mcf (a)	$	4.36	$	4.33	$	4.45
Collars
Total Volume (Bcf)	12		23		–
Average Floor Price per Mcf (NYMEX) (a)	$	5.05	$	5.03	$	–
Average Cap Price per Mcf (NYMEX) (a)	$	8.85	$	8.97	$	–

(a)The average price is based on a conversion rate of 1.05 MMBtu/Mcf.

(b)July through December

(c)For 2016, the Company also has a natural gas sales agreement for approximately 35 Bcf that includes a NYMEX ceiling price of $4.88 per Mcf.

See Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” and Note E to the Company’s Condensed Consolidated Financial Statements for further discussion of the Company’s hedging program.

Commitments and Contingencies

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company.  While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings.  The Company accrues legal and other direct costs related to loss contingencies when actually incurred.  The Company has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or liquidity of the Company.

During 2014, the Company increased its contractual commitments by entering into additional third-party pipeline capacity through its wholly-owned gas marketing subsidiary, EQT Energy, LLC (EQT Energy).  The most significant additions include additional TETCO capacity of 245,000 dth per day that enables the Company to reach markets in eastern Pennsylvania.  This capacity has a term of approximately seven years.  In addition, EQT Energy executed a binding precedent agreement with Rockies Express Pipeline, LLC for 300,000 dth per day of pipeline capacity from Clarington, Ohio to various delivery points in the Midwest. This binding precedent agreement has a 20-year term, and the capacity is expected to be operational beginning in the second half of 2015.

Dividend

On July 9, 2014, the Board of Directors of the Company declared a regular quarterly cash dividend of three cents per share, payable September 1, 2014, to the Company’s shareholders of record at the close of business on August 15, 2014.

On July 22, 2014, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s common and subordinated unitholders of $0.52 per unit for the second quarter of 2014, together with the corresponding distribution to the general partner of $0.7 million related to its 2% general partner interest and $1.9 million related to its incentive distribution rights. The cash distribution is payable on August 14, 2014, to unitholders of record at the close of business on August 5, 2014, and to the general partner.

Critical Accounting Policies

The Company’s critical accounting policies are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2013 contained in the Company’s Annual Report on Form 10-K.  Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in the notes to the Company’s Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q for the three and six month periods ended

35

EQT Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

June 30, 2014.  The application of the Company’s critical accounting policies may require management to make judgments and estimates about the amounts reflected in the Condensed Consolidated Financial Statements.  Management uses historical experience and all available information to make these estimates and judgments.  Different amounts could be reported using different assumptions and estimates.

36

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the operating results of the Company primarily at EQT Production and the storage, marketing and other activities at EQT Midstream.  The Company’s use of derivatives to reduce the effect of this volatility is described in Note E to the Condensed Consolidated Financial Statements and under the caption “Commodity Risk Management” in the “Capital Resources and Liquidity” section of Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.  The Company uses derivative commodity instruments that are placed primarily with financial institutions, and the creditworthiness of these institutions is regularly monitored.  The Company also enters into derivative instruments to hedge other forecasted natural gas purchases and sales, to hedge natural gas inventory, to hedge basis and to hedge exposure to fluctuations in interest rates.  The Company’s use of derivative instruments is implemented under a set of policies approved by the Company’s Corporate Risk Committee and reviewed by the Audit Committee of the Board of Directors.

Commodity Price Risk

For the derivative commodity instruments used to hedge the Company’s forecasted production, most of which is hedged at NYMEX natural gas prices, the Company sets policy limits relative to the expected production and sales levels which are exposed to price risk.  For the derivative commodity instruments used to hedge forecasted natural gas purchases and sales which are exposed to price risk and to hedge natural gas inventory which is exposed to changes in fair value, the Company sets limits related to acceptable exposure levels. The Company does not enter into natural gas derivative commodity instruments for trading purposes.

The financial instruments currently utilized by the Company are primarily fixed price futures contracts, swap agreements and collar agreements which may require payments to or receipt of payments from counterparties based on the differential between two prices for the commodity. The Company also considers other contractual agreements in implementing its commodity hedging strategy.

The Company monitors price and production levels on a continuous basis and makes adjustments to quantities hedged as warranted.  The Company’s overall objective in its hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

With respect to the derivative commodity instruments held by the Company as of June 30, 2014 and December 31, 2013, the Company hedged portions of expected equity production, portions of forecasted purchases and sales, portions of natural gas inventory and portions of its basis exposure by utilizing futures contracts, swap agreements and collar agreements covering approximately 296 Bcf and 388 Bcf of natural gas, respectively.  See the “Commodity Risk Management” section in the “Capital Resources and Liquidity” section of Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q for further discussion.

A hypothetical decrease of 10% in the market price of natural gas from the June 30, 2014 and December 31, 2013 levels would increase the fair value of natural gas derivative instruments by approximately $128.1 million and $151.7 million, respectively.  A hypothetical increase of 10% in the market price of natural gas from the June 30, 2014 and December 31, 2013 levels would decrease the fair value of natural gas derivative instruments by approximately $128.3 million and $151.6 million, respectively.

The Company determined the change in the fair value of the derivative commodity instruments using a method similar to its normal determination of fair value as described in Note E to the Condensed Consolidated Financial Statements. The Company assumed a 10% change in the price of natural gas from its levels at June 30, 2014 and December 31, 2013. The price change was then applied to the natural gas derivative commodity instruments recorded on the Company’s Condensed Consolidated Balance Sheets, resulting in the change in fair value.

The above analysis of the derivative commodity instruments held by the Company does not include the offsetting impact that the same hypothetical price movement may have on the Company’s physical sales of natural gas. The portfolio of derivative commodity instruments held to hedge the Company’s forecasted production approximates a

37

portion of the Company’s expected physical sales of natural gas.  Therefore, an adverse impact to the fair value of the portfolio of derivative commodity instruments held to hedge the Company’s forecasted production associated with the hypothetical changes in commodity prices referenced above should be offset by a favorable impact on the Company’s physical sales of natural gas, assuming the derivative commodity instruments are not closed out in advance of their expected term, the derivative commodity instruments continue to function effectively as hedges of the underlying risk, the anticipated transactions occur as expected and basis does not significantly change.

If the underlying physical transactions or positions are liquidated prior to the maturity of the derivative commodity instruments, a loss on the financial instruments may occur or the derivative commodity instruments might be worthless as determined by the prevailing market value on their termination or maturity date, whichever comes first.

Interest Rate Risk

Changes in interest rates affect the amount of interest the Company and the Partnership earn on cash, cash equivalents and short-term investments and the interest rates the Company and the Partnership pay on borrowings under their respective revolving credit facilities. All of the Company’s long-term borrowings are fixed rate and thus do not expose the Company to fluctuations in its results of operations or liquidity from changes in market interest rates.  Changes in interest rates do affect the fair value of the Company’s fixed rate debt. See Note H to the Condensed Consolidated Financial Statements for further discussion of the Company’s borrowings and Note F to the Condensed Consolidated Financial Statements for a discussion of fair value measurements, including the fair value of long-term debt.

Other Market Risks

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts.  This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change.  The Company believes that NYMEX-traded futures contracts have limited credit risk because Commodity Futures Trading Commission regulations are in place to protect exchange participants, including the Company, from potential financial instability of the exchange members. The Company’s OTC swap and collar derivative instruments are primarily with financial institutions and, thus, are subject to events that would impact those companies individually as well as that industry as a whole.

The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposures.  These include closely monitoring current market conditions, counterparty credit fundamentals and credit default swap rates.  Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals.  To manage the level of credit risk, the Company enters into transactions with financial counterparties that are of investment grade or better, enters into netting agreements whenever possible and may obtain collateral or other security.

Approximately 53%, or $66.3 million, of the Company’s OTC derivative contracts at June 30, 2014 had a positive fair value. Approximately 79%, or $107.4 million, of the Company’s OTC derivative contracts at December 31, 2013 had a positive fair value.

As of June 30, 2014, the Company was not in default under any derivative contracts and had no knowledge of default by any counterparty to derivative contracts. The Company made no adjustments to the fair value of derivative contracts due to credit related concerns outside of the normal non-performance risk adjustment included in the Company’s established fair value procedure. The Company monitors market conditions that may impact the fair value of derivative contracts reported in the Condensed Consolidated Balance Sheets.

The Company is also exposed to the risk of nonperformance by credit customers on physical sales of natural gas.  A significant amount of revenues and related accounts receivable from EQT Production are generated from the sale of produced natural gas, NGLs and crude oil to certain marketers, utility and industrial customers located mainly in the Appalachian Basin and a gas processor in Kentucky and West Virginia. Additionally, a significant amount of revenues and related accounts receivable from EQT Midstream are generated from the gathering and transporting of natural gas in Kentucky, Virginia, Pennsylvania and West Virginia.

38

The Company has a $1.5 billion revolving credit facility that expires on February 18, 2019.  The credit facility is underwritten by a syndicate of financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Company. As of June 30, 2014, the Company had no loans or letters of credit outstanding under the facility.  No one lender of the large group of financial institutions in the syndicate holds more than 10% of the facility.  The Company’s large syndicate group and relatively low percentage of participation by each lender is expected to limit the Company’s exposure to problems or consolidation in the banking industry.

The Partnership has a $750 million revolving credit facility that matures on February 18, 2019. The credit facility is underwritten by a syndicate of financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Partnership. As of June 30, 2014, the Partnership had $330 million of loans outstanding and no letters of credit outstanding under its credit facility. No one lender of the large group of financial institutions in the syndicate holds more than 10% of the facility. The Partnership’s large syndicate group and relatively low percentage of participation by each lender is expected to limit the Partnership’s exposure to problems or consolidation in the banking industry. The Company is not a guarantor of the Partnership’s obligations under the credit facility.

Item 4.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including the Company’s Principal Executive Officer and Principal Financial Officer, an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), was conducted as of the end of the period covered by this report.  Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the second quarter of 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

39

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company. While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. The Company accrues legal and other direct costs related to loss contingencies when actually incurred. The Company has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or liquidity of the Company.

Environmental Proceedings

In June and August 2012, the Company received three Notices of Violation (NOVs) from the Pennsylvania Department of Environmental Protection (the PADEP).  The NOVs alleged violations of the Pennsylvania Oil and Gas Act and Clean Streams Law in connection with the unintentional release in May 2012, by a Company vendor, of water from an impaired water pit at a Company well location in Tioga County, Pennsylvania.  Since confirming the release, the Company has cooperated with the PADEP in remediating the affected areas.

During the second quarter of 2014, the Company received a proposed consent assessment of civil penalty (CACP) from the PADEP and the Pennsylvania Fish and Boat Commission (the PFBC).  Under the CACP, the PADEP proposed a civil penalty related to the NOVs and the PFBC proposed a civil penalty related to possible violations of the Pennsylvania Fish and Boat Code.  The Company is in continuing settlement discussions with the PADEP and the PFBC. While the Company expects the CACP to result in civil penalties that exceed $100,000, the Company expects the resolution of these matters, individually or in the aggregate, will not have a material impact on the financial position, results of operations or liquidity of the Company.

Item 1A. Risk Factors

While cyber security threats are embedded in a number of the Company’s risk factors discussed in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, in light of externalities, including the increase in cyber crime and cyber terrorism, the Company determined to add a standalone risk factor relating to cyber incidents:

Cyber incidents may adversely impact our operations.

Our business has become increasingly dependent upon digital technologies, including information systems, infrastructure and cloud applications, to operate our production and midstream businesses, and the maintenance of our financial and other records has long been dependent upon such technologies. The U.S. government has issued public warnings that indicate that energy assets might be specific targets of cyber security threats. Deliberate attacks on, or unintentional events affecting, our systems or infrastructure, the systems or infrastructure of third parties or the cloud could lead to corruption or loss of our proprietary data and potentially sensitive data, delays in production or delivery of natural gas and NGLs, difficulty in completing and settling transactions, challenges in maintaining our books and records, environmental damage, communication interruptions, other operational disruptions and third party liability.  Further, as cyber incidents continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents.

Information regarding additional risk factors is discussed in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

40

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth the Company’s repurchases of equity securities registered under Section 12 of the Exchange Act that have occurred during the three months ended June 30, 2014:

				Total number
Period	Total number of shares purchased	Average price paid per share		of shares purchased as part of publicly announced plans or programs (b)	Maximum number of shares that may yet be purchased under the plans or programs (b)
April 2014  (April  1 – April 30)	–	–		–	–
May  2014  (May 1 – May 31) (a)	747	$	102.56	–	–
June 2014 (June 1 – June 30)	300,000	107.89		300,000	700,000
Total	300,747	$	107.88	300,000	700,000

(a)Reflects shares withheld by the Company to pay taxes upon vesting of restricted stock.

(b)On April 30, 2014, the Company’s Board of Directors approved a share repurchase authorization of up to 1,000,000 shares of the Company’s outstanding common stock.  The Company may repurchase shares from time to time in open market or in privately negotiated transactions.  The share repurchase authorization does not obligate the Company to acquire any specific number of shares, has no pre-established end date and may be discontinued by the Company at any time.

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Item 6.  Exhibits

10.01	2014 Long-Term Incentive Plan
10.02	2006 Payroll Deduction and Contribution Program (as amended and restated November 20, 2013)
31.01	Rule 13(a)-14(a) Certification of Principal Executive Officer
31.02	Rule 13(a)-14(a) Certification of Principal Financial Officer
32	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer
101	Interactive Data File

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EQT CORPORATION
(Registrant)
By:	/s/ Philip P. Conti
	Philip P. Conti
Senior Vice President and Chief Financial Officer

Date:  July 24, 2014

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INDEX TO EXHIBITS

Exhibit No.	Description	Method of Filing
10.01	2014 Long-Term Incentive Plan	Filed as Exhibit 10.1 to Form 8-K filed on May 1, 2014
10.02	2006 Payroll Deduction and Contribution Program (as amended and restated November 20, 2013)	Filed herewith as Exhibit 10.02
31.01	Rule 13(a)-14(a) Certification of Principal Executive Officer	Filed herewith as Exhibit 31.01
31.02	Rule 13(a)-14(a) Certification of Principal Financial Officer	Filed herewith as Exhibit 31.02
32	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer	Filed herewith as Exhibit 32
101	Interactive Data File	Filed herewith as Exhibit 101

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EX-10.02

Exhibit 10.02

EQT Corporation

(formerly known as Equitable Resources, Inc. )

2006 PAYROLL DEDUCTION

AND

CONTRIBUTION PROGRAM

(as amended and restated November 20, 2013)

EQT CORPORATION
2006 PAYROLL DEDUCTION AND CONTRIBUTION PROGRAM
(As amended and restated November 20, 2013)

TABLE OF CONTENTS

ARTICLE I		1
1.1	Statement of Purpose	1
ARTICLE II - DEFINITIONS		1
2.1	Base Salary	1
2.1	Bonus	1
2.3	Code	1
2.4	Committee (BAC) and Committee (BIC)	1
2.5	Company	2
2.6	Company Benefit	2
2.7	Compensation	2
2.8	Contribution Amount	2
2.9	Eligible Employee	2
2.10	Employer	2
2.11	Management Development and Compensation Committee	2
2.12	Participant	2
2.13	Personal Retirement Annuity	2
2.14	Program Year	3
2.15	Program	3
2.16	Qualifying CIC Agreement	3
2.17	Selected Affiliate	3
ARTICLE III - ELIGIBILITY AND PARTICIPATION		3
3.1	Eligibility	3
3.2	Participation; Removal from Participation	4
3.3	Ineligible Participant	4
ARTICLE IV - CONTRIBUTIONS AND COMPANY BENEFITS		5
4.1	Contribution Amounts	5
4.2	Company Benefit	5
4.3	Company Benefit Amounts	5
ARTICLE V - PERSONAL RETIREMENT ANNUITIES		6
5.1	General	6
5.2	Terms of Personal Retirement Annuity	6
ARTICLE VI - ADMINISTRATION		6
6.1	Committees	6
6.2	Agents	7
6.3	Binding Effect of Decisions	7
6.4	Indemnification of Committees	7

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ARTICLE VII - AMENDMENT AND TERMINATION OF PROGRAM		7
7.1	Amendment	7
7.2	Termination	8
ARTICLE VIII - MISCELLANEOUS		8
8.1	Funding	8
8.2	Nonassignability	8
8.3	No Acceleration of Benefits; No Deferred Compensation; Taxation; Tax Withholding	8
8.4	Captions	9
8.5	Governing Law	9
8.6	Successors	9
8.7	No Right to Continued Service	9
8.8	Benefit Claims	9

EXHIBIT A	– Section 3.1 – Description of Eligible Employees	11
EXHIBIT B	– Personal Retirement Annuity	12

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ARTICLE I

1.1Statement of Purpose

This is the EQT Corporation 2006 Payroll Deduction and Contribution Program (as amended from time to time, the “Program”).  The purpose of the Program is to provide a select group of management and highly compensated employees of the Employer with the ability to deposit in a Personal Retirement Annuity, as per Article V, an amount of Company Benefit on an after-tax basis (and, for periods prior to January 1, 2011, portions of their compensation payable for services rendered to the Employer).  It is intended that the Program will assist in attracting and retaining qualified individuals to serve as officers and managers of the Employer.  From and after February 1, 2013, participation in this Program is limited to individuals who have executed and delivered to the Company a Qualifying CIC Agreement, and such continuing participation in this Program, together with the increase in the Company Benefit described in paragraph 4.2(c) below and the additional Company Benefit described in paragraph 4.2(d) below, serve as consideration for such execution and delivery of a Qualifying CIC Agreement.

ARTICLE II

DEFINITIONS

When used in this Program and initially capitalized, the following words and phrases shall have the meanings indicated:

2.1Base Salary.

“Base Salary” means a Participant’s base earnings paid by the Employer to a Participant without regard to any increases or decreases in base earnings as a result of an election between benefits or cash provided under a plan of an Employer maintained pursuant to Section 125 or 401(k) of the Code.

2.2Bonus.

“Bonus” means the total amount awarded and paid, prior to any reduction for applicable tax withholdings, under the EQT Corporation 2011 Executive Short-Term Incentive Plan (as implemented each year) or the EQT Corporation Short-Term Incentive Plan (as implemented each year).

2.3Code.

“Code” means the Internal Revenue Code of 1986, as amended.

2.4Committee (BAC) and Committee (BIC).

“Committee (BAC)” and “Committee (BIC)” have the meanings set forth in Section 6.1.  Together the Committee (BAC) and the Committee (BIC) shall be referred to as the “Committees.”

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2.5Company.

“Company” means EQT Corporation and any successor thereto.

2.6Company Benefit.

“Company Benefit” means the benefit contributed to the Personal Retirement Annuity on behalf of the Participant pursuant to Sections 4.2 and 4.3.

2.7Compensation.

“Compensation” means the Base Salary payable with respect to an Eligible Employee for each Program Year in excess of the Base Salary taken into account for purposes of determining a Participant’s deferrals under the EQT 401(k) Plan (as defined in Section 4.2).

2.8Contribution Amount.

“Contribution Amount” means, for periods prior to January 1, 2011, the amount contributed to the Personal Retirement Annuity by a Participant under Section 4.1.

2.9Eligible Employee.

“Eligible Employee” means a highly compensated or management employee of the Employer who is designated by the Company, by name or group or description, in accordance with Section 3.1, as eligible to participate in the Program; provided that to the extent such employee is an executive officer such participation must be approved by the Management Development and Compensation Committee.

2.10Employer.

“Employer” means, with respect to a Participant, the Company or the Selected Affiliate which pays such Participant’s Compensation.

2.11Management Development and Compensation Committee.

“Management Development and Compensation Committee” means the Management Development and Compensation Committee of the Company’s Board of Directors.

2.12Participant.

“Participant” means any Eligible Employee listed on Exhibit A and designated under Section 3.2.

2.13Personal Retirement Annuity.

“Personal Retirement Annuity” means the annuity described in Section 5.1.

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2.14Program Year.

“Program Year” means each twelve-month period commencing January 1 and ending December 31, except that the first Program Year shall commence on August 14, 2006 and end on December 31, 2006.

2.15Program.

“Program” means this EQT Corporation 2006 Payroll Deduction and Contribution Program, as amended from time to time.

2.16Qualifying CIC Agreement.

“Qualifying CIC Agreement” means an amended and restated change of control agreement described in Section 3.1.

2.17Selected Affiliate.

“Selected Affiliate” means (1) any company in an unbroken chain of companies beginning with the Company if each of the companies other than the last company in the chain owns or controls, directly or indirectly, stock possessing not less than 50 percent of the total combined voting power of all classes of stock in one of the other companies, or (2) any partnership or joint venture in which one or more of such companies is a partner or venturer, each of which shall be selected by the Company.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1Eligibility.

Eligibility to participate in the Program is limited to Eligible Employees.  From time to time, and subject to Section 3.3, the Company shall prepare, and attach to the Program as Exhibit A, a complete list of the Eligible Employees, by individual name or by reference to an identifiable group of persons or by descriptions of individuals which would qualify as individuals who are eligible to participate, and all of whom shall be a select group of management or highly compensated employees.  Notwithstanding the foregoing, from and after February 1, 2013, no individual shall qualify as an Eligible Employee unless and until he or she shall have executed and delivered to the Company on or before February 15, 2013 an amended and restated change of control agreement, in the form approved by the Management Development and Compensation Committee (a “Qualifying CIC Agreement”), that, to the extent applicable eliminates any “single trigger” payment provision and any tax gross up-provision (except as such provision may relate to medical, long-term disability, dental or life insurance benefits).  For the avoidance of doubt, any individual previously participating in the Program shall automatically and without further action by the Company or the Management Development and Compensation Committee cease to be an Eligible Employee if such individual has not executed and delivered to the Company a Qualifying CIC Agreement

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on or before February 15, 2013; provided that any individual who fails to deliver a Qualifying CIC Agreement by such date may, in the discretion of the Management Development and Compensation Committee, again become an Eligible Employee upon the execution and delivery to the Company of a Qualifying CIC Agreement.

3.2Participation; Removal from Participation.

Participation in the Program shall be limited to Eligible Employees.  An Eligible Employee shall commence participation in the Program upon designation as an Eligible Employee by the Vice President  & Chief Human Resources Officer of the Company, provided that, to the extent such Eligible Employee is an executive officer, such designation also must be approved by the Management Development and Compensation Committee.  Following designation, an Eligible Employee shall continue participation in the Program from year to year without further action by the Company, subject to this Section and Section 3.3.

Notwithstanding the foregoing, an Eligible Employee may be removed from participation at any time: (a) in the case of an executive officer, by the Management Development and Compensation Committee and (b) in all other cases, by the Vice President  & Chief Human Resources Officer of the Company.  In the event of such removal:

(i)there shall be no reduction of any Program benefits attributable to participation for years prior to the year of removal;

(ii)for the year of removal, there shall be no reduction of any Program benefits (including Employer contributions under Article IV) that have been made already to the Personal Retirement Annuity prior to such removal; and

(iii)for the year of removal, the removed Eligible Employee shall not have any right to a pro-rated or proportionate share of Program benefits for such year (including Employer contributions under Article IV) that have not been made to the Personal Retirement Annuity prior to such removal.

Eligible Employees who are removed under this Section 3.2 shall be notified in writing by the Company, not later than 90 days after their removal.

3.3Ineligible Participant.

Notwithstanding any other provisions of this Program to the contrary, if the Committee (BAC) determines that any Participant may not qualify as a member of a select group of “management or highly compensated employee” within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or regulations thereunder, the Committee (BAC) may determine, in its sole discretion, that such Participant shall cease to be eligible to participate in this Program.  Upon such determination by the Committee (BAC), the Committee (BAC) shall give written notice to the individual who has ceased to be eligible to participate in this Program (and, in the

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case of an executive officer, a copy of such notice shall also be given to the Management Development and Compensation Committee).  In any such notice, the Committee (BAC) shall explain that all benefits under the Program have been forfeited (or otherwise handled in a manner that the Committee (BAC) determines is consistent with applicable law) due to loss of eligibility under applicable law.

ARTICLE IV

CONTRIBUTIONS AND COMPANY BENEFITS

4.1Contribution Amounts.

Effective January 1, 2011, no Participant may elect to have a payroll deduction taken from his or her Compensation.  Prior to January 1, 2011, all payroll deductions by Participants were administered on an after-tax basis and, consistent with Section 4.3, contributed on such basis to each Participant’s Personal Retirement Annuity.

4.2Company Benefit.

The Employer shall provide a Company Benefit under this Program with respect to each Participant who is eligible to be allocated matching contributions and/or performance contributions (also known as “retirement contributions”) under the EQT Corporation Employee Savings Plan (as amended from time to time, the “EQT 401(k) Plan”).  Prior to reduction for taxes as set forth in Section 4.3, the Company Benefit under this Program on behalf of a Participant for a Program Year shall be equal to the sum of (a) the matching contributions which would be credited to the Participant under the EQT 401(k) Plan based upon the Participant’s hypothetical pre-tax personal contribution amount that would be made under the EQT 401(k) Plan, absent the limitations of Sections 402(g), 401(a)(17), and 415 of the Code, (b) the performance contributions which would be credited to the Participant under the EQT 401(k) Plan, absent the limitations of Sections 401(a)(17) and 415 of the Code, (c) an amount equal to 9% (which increases to 11% effective with the Bonus payment in respect of the 2013 plan year) of the Participant’s Bonus payment, prior to reduction for any applicable tax withholding, and (d) an amount equal to 2% of the Participant’s Bonus payment in respect of the 2012 plan year, prior to reduction for any applicable tax withholding, only if the Participant executes and delivers to the Company on or before February 15, 2013 a Qualifying CIC Agreement.  The express provisions herein on the time and form of payment applicable to Company Benefits shall control over the terms and conditions provided in the EQT 401(k) Plan.  For the avoidance of doubt, Eligible Employees are not required to make personal contributions to their EQT 401(k) Plan account or otherwise in order to receive the Company Benefit described in items (b), (c) or (d) above and, for periods on and after January 1, 2011, personal contributions to the EQT 401(k) Plan are required to receive the Company Benefit described in item (a) above.

4.3Company Benefit Amounts.

The Company Benefit under the Program for each Participant shall be contributed by the Employer to the Participant’s Personal Retirement Annuity on an after-tax basis.

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The gross amount (pre-tax) of the Company Benefit is determined under Section 4.2.  Prior to contribution to the Participant’s Personal Retirement Annuity, the Company shall withhold, and reduce the Company Benefit by, the applicable income and other taxes that the Company determines to be appropriate.  All references herein to “contribution of the Company Benefit” (or similar terminology) shall mean such amount remaining after applicable tax withholding.  In no event shall any Company Benefit be contributed to the Participant’s Personal Retirement Annuity later than 2½ months following the Program Year to which the Company Benefit relates.  An Eligible Employee must be a full-time, regular employee of the Employer on the date that the Employer makes the contribution to the Participant’s Personal Retirement Annuity.  If a Participant ceases to be employed by the Employer as a full-time, regular employee prior to the date that the Employer makes the contribution to the Participant’s Personal Retirement Annuity, or has terminated his or her participation in the Program prior to such date, the Company Benefit for such annual period shall be forfeited without any further action required by the Employer.

ARTICLE V

PERSONAL RETIREMENT ANNUITIES

5.1       General.

The Personal Retirement Annuity to which Company Benefits will be contributed is listed on Exhibit B hereto and may be changed, on a prospective basis, from time to time.  Any such changes shall be authorized and approved by the Committee (BIC) or the Management Development and Compensation Committee.

5.2       Terms of Personal Retirement Annuity.

The terms of the Personal Retirement Annuity, which is owned by the Participant, shall be as provided solely by the third-party sponsor of such annuity, including the investment returns and elections, payment and withdrawal provisions and statements of account.  The election of investments within a Personal Retirement Annuity shall be the sole responsibility of each Participant.  The Company, the other Employers, their employees and members of the Committees are not authorized to make any recommendation to any Participant with respect to such election.  Each Participant assumes all risk connected with any adjustment to the value of his or her Personal Retirement Annuity.  None of the Committees, the Management Development and Compensation Committee, the Company and the other Employers in any way guarantees against loss or depreciation.

ARTICLE VI

ADMINISTRATION

6.1       Committees.

The administrative committee for the Program (the “Committee (BAC)”) shall be the Benefits Administration Committee of the Company.  The Committee (BAC) shall

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have (i) complete discretion to supervise the administration and operation of the Program, (ii) complete discretion to adopt rules and procedures governing the Program from time to time, and (iii) sole authority to give interpretive rulings with respect to the Program.

The investment committee for the Program (the “Committee (BIC)”) shall be the Benefits Investment Committee of the Company.  The Committee (BIC) shall have (i) complete discretion to determine and select the personal retirement annuity program under Section 5.1; (ii) complete discretion to monitor, remove and replace all or part of any personal retirement annuity program; and (iii) complete discretion to adopt rules, guidelines or other procedures for the management and investment of Program assets.

6.2       Agents.

The Committees may appoint an individual, who may be an employee of the Company, to be the Committees’ agent with respect to the day-to-day administration of the Program.  In addition, the Committees may, from time to time, employ other agents and delegate to them such administrative duties as they see fit, and may from time to time consult with counsel who may be counsel to the Company.

6.3       Binding Effect of Decisions.

Any decision or action of the Committees with respect to any question arising out of or in connection with the administration, investment, interpretation and application of the Program shall be final and binding upon all persons having any interest in the Program.

6.4       Indemnification of Committees.

The Company shall indemnify and hold harmless the members of the Committees and their duly appointed agents under Section 6.2 against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to the Program, except in the case of gross negligence or willful misconduct by any such member or agent of the Committees.

ARTICLE VII

AMENDMENT AND TERMINATION OF PROGRAM

7.1       Amendment.

The Company, on behalf of itself and of each Selected Affiliate, may at any time amend, suspend or reinstate any or all of the provisions of the Program, except that no such amendment, suspension or reinstatement may adversely affect any Participant’s Personal Retirement Annuity as it existed as of the day before the effective date of such amendment, suspension or reinstatement, without such Participant’s prior written consent, and provided that any amendment, suspension or reinstatement affecting the benefits to any executive officer of the Company shall require the approval of the Management Development and Compensation Committee.  Written notice of any

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amendment, suspension or reinstatement with respect to the Program shall be given to each Participant by the Committee (BAC).

7.2       Termination.

The Company, on behalf of itself and of each Selected Affiliate, in its sole discretion, may terminate this Program at any time and for any reason whatsoever.  A termination of the Program shall not adversely affect any Participant’s Personal Retirement Annuity as it existed on the day before such termination, without the Participant’s prior written consent.

ARTICLE VIII

MISCELLANEOUS

8.1       Funding.

Participants and their heirs, successors and assigns, shall have no secured interest or claim in any property or assets of the Company or any other Employer.  The Employer’s obligation under the Program to contribute Company Benefits to a Participant’s Personal Retirement Annuity shall be merely that of an unfunded and unsecured promise.  To the extent that any Participant or other person acquires a right to receive Company Benefits under the Program, such right shall be no greater than the right, and each Participant shall at all times have the status, of a general unsecured creditor of the Company or any other Employer.

8.2       Nonassignability.

No right or interest under the Program of a Participant (or any person claiming through or under him or her) shall be assignable or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of any such Participant.  If any Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his or her benefits hereunder or any part thereof, or if by reason of his or her bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him or her, then the Committee (BAC), in its discretion, may terminate his or her interest in any such benefit to the extent the Committee (BAC) considers necessary or advisable to prevent or limit the effects of such occurrence.  Termination shall be effected by filing a written “termination declaration” with the Company’s Corporate Director, Compensation and Benefits and making reasonable efforts to deliver a copy to the Participant whose interest is adversely affected.

8.3       No Acceleration of Benefits; No Deferred Compensation; Taxation; Tax Withholding.

This Program is not intended to provide for the deferral of compensation and there shall be no acceleration of the time or schedule of any payments or contributions under the Program.  The Employer shall be and is authorized to withhold from Company

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Benefits under this Program, or from such other compensation or benefits paid or payable to the Participant, those federal, state or local income taxes or similar charges that the Committee (BAC), in its sole discretion, determines are required to be withheld under applicable law. The Employer does not represent or guarantee that any particular federal, state or local income, payroll, personal property or other tax consequence will result from participation in this Program.  Participants are directed to consult with professional tax advisors to determine the tax consequences of their participation.

8.4       Captions.

The captions contained herein are for convenience only and shall not control or affect the meaning or construction hereof.

8.5       Governing Law.

The provisions of the Program shall be construed and interpreted according to the laws of the Commonwealth of Pennsylvania without regard to its conflicts of laws provisions.  If any insubstantial provision of this Program is declared unlawful for any reason, including by state or federal legislative act, regulation or judicial ruling, such provision shall become inoperative but will not affect the validity of any other provision.

8.6       Successors.

The provisions of the Program shall bind and inure to the benefit of the Company, the other Employers, and their respective successors and assigns.  The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise, acquire all or substantially all of the business and assets of the Company or any other Employer and successors of any such Company or other business entity.

8.7       No Right to Continued Service.

Nothing contained herein shall be construed to confer upon any Eligible Employee the right to continue to serve as an Eligible Employee of an Employer or in any other capacity.

8.8       Benefit Claims.

(a)        Initial Claims.  To make a claim for a benefit, a Participant (or the Participant’s authorized representative) may file a written request setting forth the claim for such benefit with: (i) in the case of an executive officer, the Management Development and Compensation Committee; and (ii) in all other cases, the Committee (BAC).  (On a case-by-case basis, the Management Development and Compensation Committee may delegate its claim review functions to the Committee (BAC).  All references in this Section 8.8 to Committee (BAC) shall include the Management Development and Compensation Committee, where the Management Development and Compensation Committee undertakes the review of a claim and does not delegate such review to the Committee (BAC).)

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(b)        Denied Claims.  If the Committee (BAC) receives a claim in writing, the Committee (BAC) will advise the Participant of its decision on the claim in writing in a reasonable period of time after receipt of the claim (not to exceed 120 days).  The notice shall set forth the following information:

(1)        The specific basis for its decision,

(2)        Specific reference to pertinent Program provisions on which the decision is based,

(3)        A description of any additional material or information necessary for the Participant to perfect a claim and an explanation of why such material or information is necessary,

(4)        An explanation of the Program’s claim review procedure, and

(5)        If applicable, a statement of the Participant’s right to bring an action under Section 502 of ERISA upon the denial of the appeal of a previously denied claim.

(c)        Appealing a Claim.  The Participant (or the Participant’s authorized representative) may make a written request within 60 days of the denial to the Committee (BAC) to have a designated appeals authority (which shall be different than the Committee (BAC)) review the denial.  The Participant may review the pertinent documents and submit issues and comments in writing for consideration by the appeals authority.  If the Participant does not request a review of the initial determination within such 60-day period, he or she will be barred from challenging the determination by reason of failure to exhaust administrative remedies.

Within 60 days after the Committee (BAC)’s receipt of the Participant’s request for appeal review, the Participant will receive notice of the appeals authority’s decision.  If the claim is further denied, the notice will contain the specific reasons for the decision of the appeals authority; specific references to the pertinent provisions of this Program upon which the decision is based; and, if applicable, a statement of the Participant’s right to bring an action under Section 502 of ERISA.  If special circumstances require that the 60-day time period be extended, the appeals authority will notify the Participant within the initial 60-day time period and will render the decision as soon as possible, but no later than 120 days, after receipt of the request for review.

(d)       Limitation of Time to Commence Legal Action.  Notwithstanding any otherwise applicable legally-prescribed statute of limitations period, no legal action may be commenced or maintained to recover benefits under this Program more than twelve (12) months after the final review decision by the appeals authority has been rendered (or deemed rendered).

- 10 -

EXHIBIT A

Section 3.1 - Description of Eligible Employees

·The executive officers of the Company designated as Eligible Employees by the Vice President & Chief Human Resources Officer and approved by the Management Development and Compensation Committee, which record of designated Eligible Employees is maintained in the Company’s Human Resources Department.

·Such employees of the Company or any Selected Affiliate other than executive officers of the Company designated as Eligible Employees by the Vice President & Chief Human Resources Officer, which record of designated Eligible Employees is maintained in the Company’s Human Resources Department.

Effective Date:  January 1, 2015

Initials: CP

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EXHIBIT B

Personal Retirement Annuity

Fidelity Personal Retirement Annuity

Date:  November 20, 2013

Initials:   CP

- 12 -

EX-31.01

Exhibit 31.01

CERTIFICATION

I, David L. Porges, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of EQT Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 24, 2014
	/s/ David L. Porges
	David L. Porges
	Chairman, President and Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Philip P. Conti, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of EQT Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 24, 2014
	/s/ Philip P. Conti
	Philip P. Conti
	Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION

In connection with the Quarterly Report of EQT Corporation (“EQT”) on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EQT.

/s/ David L. Porges	July 24, 2014
David L. Porges
Chairman, President and Chief Executive Officer
/s/ Philip P. Conti	July 24, 2014
Philip P. Conti
Senior Vice President and Chief Financial Officer

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Changes in Accumulated Other Comprehensive Income by Component (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	$ 22,984	$ 21,582	$ 44,703	$ 99,547
(Losses) gains recognized in accumulated OCI, net of tax	(13,455)	73,429	(52,649)	20,828
Gain reclassified from accumulated OCI, net of tax into gain on sale / exchange of assets	(16,735)		(16,735)
(Gains) losses reclassified from accumulated OCI, net of tax	11,095	(10,018)	28,570	(35,382)
Other comprehensive (loss) income	(19,095)	63,411	(40,814)	(14,554)
Balance at the end of the period	3,889	84,993	3,889	84,993
Cash flow hedge, net of tax | Natural gas
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	39,768	59,754	61,699	138,188
(Losses) gains recognized in accumulated OCI, net of tax	(13,455)	73,429	(52,649)	20,828
Gain reclassified from accumulated OCI, net of tax into gain on sale / exchange of assets	(16,735)		(16,735)
(Gains) losses reclassified from accumulated OCI, net of tax	10,883	(10,490)	28,146	(36,323)
Other comprehensive (loss) income	(19,307)	62,939	(41,238)	(15,495)
Balance at the end of the period	20,461	122,693	20,461	122,693
Cash flow hedge, net of tax | Interest rate
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(1,096)	(1,240)	(1,132)	(1,276)
(Gains) losses reclassified from accumulated OCI, net of tax	36	36	72	72
Other comprehensive (loss) income	36	36	72	72
Balance at the end of the period	(1,060)	(1,204)	(1,060)	(1,204)
Pension and other post-retirement benefits liability adjustment, net of tax
Changes in accumulated other comprehensive income (loss)
Balance at the beginning of the period	(15,688)	(36,932)	(15,864)	(37,365)
(Gains) losses reclassified from accumulated OCI, net of tax	176	436	352	869
Other comprehensive (loss) income	176	436	352	869
Balance at the end of the period	$ (15,512)	$ (36,496)	$ (15,512)	$ (36,496)

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Derivative Instruments (Details 3) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Asset derivatives:
Derivative instruments, at fair value	$ 66,408	$ 107,647
Liability derivatives:
Derivative instruments, at fair value	58,116	29,651
Margin deposits received (remitted to) counterparties	(100)	(300)
Commodity derivatives
Asset derivatives:
Derivative instruments, at fair value	66,408	107,647
Derivative instruments subject to master netting agreements	(26,331)	(20,843)
Derivative instruments, net	40,077	86,804
Liability derivatives:
Derivative instruments, at fair value	58,116	29,651
Derivative instruments subject to master netting agreements	(26,331)	(20,843)
Margin deposits received (remitted to) counterparties	(103)	(266)
Derivative instruments, net	$ 31,682	$ 8,542

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Measurements

Derivative instrument assets and liabilities measured at fair value on a recurring basis

			Fair value measurements at reporting date using
Description	As of June 30, 2014		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	66,408	$	123	$	66,285	$	–
Liabilities
Derivative instruments, at fair value	$	58,116	$	–	$	58,116	$	–

			Fair value measurements at reporting date using
Description	As of December 31, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	107,647	$	240	$	107,407	$	–
Liabilities
Derivative instruments, at fair value	$	29,651	$	315	$	29,336	$	–

Fair value measurements using significant unobservable inputs (Level 3)

	Fair value measurements using significant unobservable inputs (Level 3) Derivative instruments, at fair value, net
	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(Thousands)
Beginning of period	$	–	$	69,865	$	–	$	90,714
Total gains or losses:
Included in earnings	–		(1,178)		–		(755)
Included in OCI	–		13,125		–		1,392
Purchases	–		–		–		72
Settlements	–		(7,124)		–		(16,735)
Transfers in and/or out of Level 3	–		–		–		–
End of period	$	–	$	74,688	$	–	$	74,688

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Revolving Credit Facilities (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Line of Credit Facility
Loans outstanding	$ 0		$ 0		$ 0
Letter of credit outstanding amount at the end of period	0		0		0
Maximum amount of outstanding short-term loans at any time during the period	0	178.5	0	178.5
Average daily balance of short-term loans outstanding during the period		26.7		13.4
Weighted average interest rates of average daily balance of short-term loans (as a percent)		0.83%		0.41%
Commitment fee paid to maintain credit facility (as a percent)	0.06%	0.06%	0.12%	0.11%
EQT Midstream Partners
Line of Credit Facility
Loans outstanding	330		330		0
Letter of credit outstanding amount at the end of period	0		0		0
Maximum amount of outstanding short-term loans at any time during the period	450.0	0	450.0	0
Average daily balance of short-term loans outstanding during the period	$ 252.2		$ 173.0
Weighted average interest rates of average daily balance of short-term loans (as a percent)	1.66%		1.68%
Commitment fee paid to maintain credit facility (as a percent)	0.06%	0.06%	0.13%	0.13%

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Statements of Condensed Consolidated Equity (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Statements of Condensed Consolidated Equity
Dividends (in dollars per share)	$ 0.06	$ 0.06
Distributions to noncontrolling interests (in dollars per common unit)	$ 0.95	$ 0.72

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Financial Information by Business Segment (Details) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended
	May 07, 2014	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 item	Jun. 30, 2013
Financial Information by Business Segment
Number of operating segments				2
Operating segments information
Revenues from external customers		$ 526,168,000	$ 473,093,000	$ 1,187,793,000	$ 888,976,000
Operating income		224,771,000	161,980,000	581,562,000	306,459,000
Reconciliation of operating income to income from continuing operations:
Other income		2,579,000	2,041,000	5,130,000	4,322,000
Interest expense		31,873,000	37,384,000	63,841,000	75,136,000
Income taxes		59,089,000	38,078,000	175,424,000	72,846,000
Income from continuing operations		136,388,000	88,559,000	347,427,000	162,799,000
Depreciation, depletion and amortization		157,219,000	162,473,000	309,330,000	305,509,000
Expenditure for segment assets		1,041,943,000	485,323,000	1,534,047,000	777,990,000
Cash capital expenditures	157,300,000			157,256,000
Non-cash capital expenditures		3,600,000	5,900,000	8,100,000	11,900,000
Operating segments | EQT Production
Operating segments information
Revenues from external customers		322,100,000	306,132,000	789,845,000	556,643,000
Operating income		144,689,000	105,056,000	421,894,000	179,153,000
Reconciliation of operating income to income from continuing operations:
Gain on sale / exchange of assets		31,000,000		31,000,000
Depreciation, depletion and amortization		136,251,000	144,073,000	267,490,000	268,982,000
Expenditure for segment assets		930,228,000	394,391,000	1,338,559,000	637,566,000
Cash capital expenditures		157,300,000		157,300,000
Non-cash capital expenditures		353,000,000		353,000,000
Expenditures for segment assets for property acquisitions		550,500,000	128,900,000	609,700,000	141,600,000
Operating segments | EQT Midstream
Operating segments information
Revenues from external customers		162,345,000	150,366,000	328,571,000	297,054,000
Operating income		88,527,000	72,246,000	171,596,000	146,460,000
Reconciliation of operating income to income from continuing operations:
Gain on sale / exchange of assets		6,800,000		6,800,000
Depreciation, depletion and amortization		21,130,000	18,452,000	42,139,000	36,671,000
Expenditure for segment assets		110,913,000	89,060,000	194,126,000	138,204,000
Less intersegment revenues, net
Operating segments information
Revenues from external customers		(9,709,000)	(18,232,000)	(26,684,000)	(35,289,000)
Less intersegment revenues, net | EQT Midstream
Reconciliation of operating income to income from continuing operations:
Intercompany eliminations for transmission and storage services			9,100,000		20,000,000
Third-party transportation and processing costs
Operating segments information
Revenues from external customers		51,432,000	34,827,000	96,061,000	70,568,000
Unallocated expenses and Other
Operating segments information
Operating income		(8,445,000)	(15,322,000)	(11,928,000)	(19,154,000)
Reconciliation of operating income to income from continuing operations:
Depreciation, depletion and amortization		(162,000)	(52,000)	(299,000)	(144,000)
Expenditure for segment assets		$ 802,000	$ 1,872,000	$ 1,362,000	$ 2,220,000

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EQT Midstream Partners, LP (Details) (USD $)	0 Months Ended	6 Months Ended
	May 07, 2014	Jun. 30, 2014
Subsidiary or equity method investee
Proceeds from offerings, net of underwriters' discount and estimated offering expenses		$ 902,451,000
Amount placed into a qualified trust account		342,744,000
Funds utilized in connection with the exchange of certain assets	157,300,000	157,256,000
EQT Midstream Partners
Subsidiary or equity method investee
Exchange amount	1,180,000,000
Number of common units issued to the public in an offering (in shares)	12,362,500
Proceeds from offerings, net of underwriters' discount and estimated offering expenses	902,500,000
Offering expenses	34,000,000
General partner's interest (as a percent)		2.00%
Limited partner's interest (as a percent)		34.40%
Common units (in shares)		3,959,952
Subordinated units (in shares)		17,339,718
Taxable gain for federal income tax purposes recognized	569,300,000
Amount placed into a qualified trust account		$ 500,000,000

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Financial Information by Business Segment (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Operating segments information
Total assets	$ 11,385,936	$ 9,792,053
Operating segments
Operating segments information
Total assets	9,677,951	8,873,494
Operating segments | EQT Production
Operating segments information
Total assets	7,191,308	6,359,065
Operating segments | EQT Midstream
Operating segments information
Total assets	2,486,643	2,514,429
Headquarters
Operating segments information
Total assets	$ 1,707,985	$ 918,559

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Derivative Instruments (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 MMcf	Jun. 30, 2013	Dec. 31, 2013 MMcf
Derivatives designated as hedging instruments
Pre-tax gain recorded in earnings from dedesignation of hedge	$ 28,000,000		$ 28,000,000
Amount of gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets due to forecasted transactions probable to not occur	(16,735,000)		(16,735,000)
Derivatives not designated as hedging instruments:
Amount of (loss) gain recognized in operating revenues			(17,879,000)	1,250,000
Natural Gas Hedging Instruments
Deferred net gains in accumulated other comprehensive income (loss), net of tax	20,500,000		20,500,000		61,700,000
Net unrealized gains on derivative commodity instruments	8,500,000		8,500,000
Margin deposits with brokers	100,000		100,000		300,000
Additional collateral limit for below investment grade derivative instruments, as a percentage of the derivative liability			100.00%
Aggregate fair value of derivative instruments with credit-risk related contingencies	31,200,000		31,200,000
Collateral posted	1,100,000		1,100,000
Margin deposits remitted by brokers with company	0		0		0
Commodity derivatives
Natural Gas Hedging Instruments
Margin deposits with brokers	103,000		103,000		266,000
Cash flow hedges | Interest rate derivatives
Derivatives designated as hedging instruments
Amount of (loss) gain reclassified from accumulated OCI into operating revenues/interest expense (effective portion), net of tax	36,000	36,000	72,000	72,000
Cash flow hedges | Commodity derivatives
Derivatives designated as hedging instruments
Amount of (loss) gain recognized in OCI (effective portion), net of tax	(13,455,000)	73,429,000	(52,649,000)	20,828,000
Amount of gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets due to forecasted transactions probable to not occur	16,735,000		16,735,000
Amount of (loss) gain reclassified from accumulated OCI into operating revenues/interest expense (effective portion), net of tax	(10,883,000)	10,490,000	(28,146,000)	36,323,000
Amount of gain (loss) recognized in operating revenues (ineffective portion)	987,000	(7,473,000)	(21,273,000)	(7,954,000)
Amount of gain (loss) recognized in operating revenues for fair value commodity contracts		2,700,000		(839,000)
Fair value (loss) gain recognized in operating revenues for inventory designated as hedged item		(4,075,000)		462,000
Amounts excluded from effectiveness testing of cash flow hedges	0	0	0	0
Natural Gas Hedging Instruments
Absolute quantities of derivative commodity instruments that have been designated and qualify as cash flow or fair value hedges (in Bcf)			307,000		398,000
Fair value hedges | Commodity derivatives
Derivatives designated as hedging instruments
Amount of gain (loss) recognized in income due to exclusion of the spot/forward differential from the assessment of effectiveness of fair value hedges		800,000		2,100,000
Amount of gain (loss) recognized in income due to changes in basis		2,200,000		2,500,000
Not designated as hedging instruments
Derivatives not designated as hedging instruments:
Amount of (loss) gain recognized in operating revenues	$ (8,525,000)	$ 1,512,000	$ (17,879,000)	$ 1,250,000

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Statements of Condensed Consolidated Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income	Noncontrolling Interests in Consolidated Subsidiaries
Balance at Dec. 31, 2012	$ 3,888,802	$ 1,308,771	$ 2,195,502	$ 99,547	$ 284,982
Balance (in shares) at Dec. 31, 2012		150,109
Increase (Decrease) in Stockholders' Equity
Net income	203,399		187,111		16,288
Other comprehensive loss	(14,554)			(14,554)
Dividends ($0.06 per share)	(9,038)		(9,038)
Stock-based compensation plans, net	43,966	43,737			229
Stock-based compensation plans, net (in shares)		485
Distributions to noncontrolling interests ($0.95 and $0.72 per common unit during the six months ended 2014 and 2013, respectively)	(10,350)				(10,350)
Balance at Jun. 30, 2013	4,102,225	1,352,508	2,373,575	84,993	291,149
Balance (in shares) at Jun. 30, 2013		150,594
Balance at Dec. 31, 2013	4,864,128	1,422,105	2,567,980	44,703	829,340
Balance (in shares) at Dec. 31, 2013		150,884
Increase (Decrease) in Stockholders' Equity
Net income	349,199		303,114		46,085
Other comprehensive loss	(40,814)			(40,814)
Dividends ($0.06 per share)	(9,101)		(9,101)
Stock-based compensation plans, net	22,112	20,973			1,139
Stock-based compensation plans, net (in shares)		918
Distributions to noncontrolling interests ($0.95 and $0.72 per common unit during the six months ended 2014 and 2013, respectively)	(25,674)				(25,674)
Issuance of common units of EQT Midstream Partners, LP	902,451				902,451
Repurchase and retirement of common stock	(32,368)	(12,759)	(19,609)
Repurchase and retirement of common stock (in shares)		(300)
Balance at Jun. 30, 2014	$ 6,029,933	$ 1,430,319	$ 2,842,384	$ 3,889	$ 1,753,341
Balance (in shares) at Jun. 30, 2014		151,502

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Derivative Instruments (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Asset and liability derivatives
Asset derivative	$ 66,408	$ 107,647
Liability derivative	58,116	29,651
Commodity derivatives
Asset and liability derivatives
Asset derivative	66,408	107,647
Liability derivative	58,116	29,651
Commodity derivatives designated as hedging instruments | Commodity derivatives
Asset and liability derivatives
Asset derivative	33,942	104,430
Liability derivative	47,713	27,618
Commodity derivatives not designated as hedging instruments | Commodity derivatives
Asset and liability derivatives
Asset derivative	32,466	3,217
Liability derivative	$ 10,403	$ 2,033

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Sale and Exchange of Properties (Details) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended		0 Months Ended
	May 07, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 16, 2014 Nora Gathering, LLC	Jun. 16, 2014 Range acre item
Exchange of Properties
Approximate area of acquisition (in acres)					73,000
Number of producing wells acquired					900
Area of property transferred under the asset exchange agreement (in acres)					138,000
Number of producing wells transferred under the asset exchange agreement					2,000
Ownership interest transferred (as a percent)					50.00%
Amount of cash, subject to certain post-closing adjustments	$ 157,300,000		$ 157,256,000		$ 157,300,000
Ownership percentage				50.00%
Fair value of the consideration acquired					510,300,000
Pre-tax gain recorded					37,700,000
Pre-tax gain on de-designation of derivative instruments		$ 28,000,000	$ 28,000,000		$ 28,000,000

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Statements of Consolidated Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statements of Consolidated Income
Operating revenues	$ 526,168	$ 473,093	$ 1,187,793	$ 888,976
Operating expenses:
Transportation and processing	51,723	35,866	96,898	72,597
Operation and maintenance	27,587	24,067	52,808	47,300
Production	31,882	27,747	63,822	52,636
Exploration	7,452	6,138	8,871	9,868
Selling, general and administrative	63,283	54,822	112,251	94,607
Depreciation, depletion and amortization	157,219	162,473	309,330	305,509
Total operating expenses	339,146	311,113	643,980	582,517
Gain on sale / exchange of assets	37,749		37,749
Operating income	224,771	161,980	581,562	306,459
Other income	2,579	2,041	5,130	4,322
Interest expense	31,873	37,384	63,841	75,136
Income before income taxes	195,477	126,637	522,851	235,645
Income taxes	59,089	38,078	175,424	72,846
Income from continuing operations	136,388	88,559	347,427	162,799
Income from discontinued operations, net of tax	1,876	5,559	1,772	40,600
Net income	138,264	94,118	349,199	203,399
Less: Net income attributable to noncontrolling interests	27,343	7,262	46,085	16,288
Net income attributable to EQT Corporation	110,921	86,856	303,114	187,111
Amounts attributable to EQT Corporation:
Income from continuing operations	109,045	81,297	301,342	146,511
Income from discontinued operations	1,876	5,559	1,772	40,600
Net income attributable to EQT Corporation	$ 110,921	$ 86,856	$ 303,114	$ 187,111
Basic:
Weighted average common stock outstanding (in shares)	151,744	150,525	151,522	150,425
Income from continuing operations (in dollars per share)	$ 0.72	$ 0.54	$ 1.99	$ 0.97
Income from discontinued operations (in dollars per share)	$ 0.01	$ 0.04	$ 0.01	$ 0.27
Net income (in dollars per share)	$ 0.73	$ 0.58	$ 2.00	$ 1.24
Diluted:
Weighted average common stock outstanding (in shares)	152,570	151,393	152,537	151,191
Income from continuing operations (in dollars per share)	$ 0.72	$ 0.54	$ 1.98	$ 0.97
Income from discontinued operations (in dollars per share)	$ 0.01	$ 0.03	$ 0.01	$ 0.27
Net income (in dollars per share)	$ 0.73	$ 0.57	$ 1.99	$ 1.24
Dividends declared per common share (in dollars per share)	$ 0.03	$ 0.03	$ 0.06	$ 0.06

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 1,274,265	$ 845,641
Restricted cash	342,744
Accounts receivable (less accumulated provision for doubtful accounts: $6,139 at June 30, 2014 and $5,171 at December 31, 2013)	235,306	235,781
Inventory	13,389	19,656
Derivative instruments, at fair value	66,408	107,647
Prepaid expenses and other	32,065	46,700
Total current assets	1,964,177	1,255,425
Equity in nonconsolidated investments		128,983
Property, plant and equipment	12,372,135	11,062,136
Less: accumulated depreciation and depletion	3,024,600	2,728,374
Net property, plant and equipment	9,347,535	8,333,762
Other assets	74,224	73,883
Total assets	11,385,936	9,792,053
Current liabilities:
Current portion of long-term debt	11,086	11,162
Short-term loans	330,000
Accounts payable	381,280	330,329
Derivative instruments, at fair value	58,116	29,651
Other current liabilities	168,483	152,268
Total current liabilities	948,965	523,410
Long-term debt	2,486,533	2,490,354
Deferred income taxes	1,654,506	1,655,765
Other liabilities and credits	265,999	258,396
Total liabilities	5,356,003	4,927,925
Stockholders' equity:
Common stock, no par value, authorized 320,000 shares, shares issued: 175,384 at June 30, 2014 and 175,684 at December 31, 2013	1,861,468	1,869,843
Treasury stock, shares at cost: 23,882 at June 30, 2014 and 24,800 at December 31, 2013	(431,149)	(447,738)
Retained earnings	2,842,384	2,567,980
Accumulated other comprehensive income	3,889	44,703
Total common stockholders' equity	4,276,592	4,034,788
Noncontrolling interests in consolidated subsidiaries	1,753,341	829,340
Total equity	6,029,933	4,864,128
Total liabilities and equity	$ 11,385,936	$ 9,792,053

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Fair Value Measurements (Details 2) (USD $)			3 Months Ended	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013 Derivative instruments, at fair value, net	Jun. 30, 2013 Derivative instruments, at fair value, net
Fair Value Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation
Balance at the beginning of the period			$ 69,865,000	$ 90,714,000
Total gains or losses included in earnings			(1,178,000)	(755,000)
Total gains or losses included in OCI			13,125,000	1,392,000
Purchases				72,000
Settlements			(7,124,000)	(16,735,000)
Balance at the end of the period			74,688,000	74,688,000
Unrealized gains and losses included in earnings			1,200,000	1,200,000
Estimated fair value of long-term debt	$ 2,900,000,000	$ 2,800,000,000

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2014

Discontinued Operations

Summary of the components of discontinued operations activity

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Operating revenues	$	–	$	56,573	$	–	$	210,619
Income from discontinued operations before income taxes	3,258		9,384		3,077		63,590
Income tax expense	1,382		3,825		1,305		22,990
Income from discontinued operations, net of tax	$	1,876	$	5,559	$	1,772	$	40,600

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Income Taxes (Details)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Taxes
Effective tax rate (as a percent)	33.60%	30.90%

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments

Derivatives designated and not designated as hedging instruments

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Commodity derivatives designated as cash flow hedges
Amount of (loss) gain recognized in OCI (effective portion), net of tax	$	(13,455)	$	73,429	$	(52,649)	$	20,828
Amount of gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets due to forecasted transactions probable to not occur	16,735		–		16,735		–
Amount of (loss) gain reclassified from accumulated OCI into operating revenues (effective portion), net of tax	(10,883)		10,490		(28,146)		36,323
Amount of gain (loss) recognized in operating revenues (ineffective portion) (a)	987		(7,473)		(21,273)		(7,954)
Interest rate derivatives designated as cash flow hedges
Amount of loss reclassified from accumulated OCI, net of tax, into interest expense (effective portion)	$	36	$	36	$	72	$	72
Commodity derivatives designated as fair value hedges (b)
Amount of gain (loss) recognized in operating revenues for fair value commodity contracts	$	–	$	2,700	$	–	$	(839)
Fair value (loss) gain recognized in operating revenues for inventory designated as hedged item	–		(4,075)			–	462
Derivatives not designated as hedging instruments
Amount of (loss) gain recognized in operating revenues	$	(8,525)	$	1,512	$	(17,879)	$	1,250

(a) No amounts have been excluded from effectiveness testing of cash flow hedges.

(b) For the three months ended June 30, 2013, the net impact on operating revenues consisted of a $0.8 million gain due to the exclusion of the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $2.2 million loss due to changes in basis. For the six months ended June 30, 2013, the net impact on operating revenues consisted of a $2.1 million gain due to the exclusion of the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $2.5 million loss due to changes in basis.

Asset and liability derivatives

	As of June 30,		As of December 31,
	2014		2013
	(Thousands)
Asset derivatives
Commodity derivatives designated as hedging instruments	$	33,942	$	104,430
Commodity derivatives not designated as hedging instruments	32,466		3,217
Total asset derivatives	$	66,408	$	107,647
Liability derivatives
Commodity derivatives designated as hedging instruments	$	47,713	$	27,618
Commodity derivatives not designated as hedging instruments	10,403		2,033
Total liability derivatives	$	58,116	$	29,651

Schedule of impact of netting agreements and margin deposits on gross derivative assets and liabilities

As of June 30, 2014	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	66,408	$	(26,331)	$	–	$	40,077
Liability derivatives:
Derivative instruments, at fair value	$	58,116	$	(26,331)	$	(103)	$	31,682

As of December 31, 2013	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to  master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	107,647	$	(20,843)	$	–	$	86,804
Liability derivatives:
Derivative instruments, at fair value	$	29,651	$	(20,843)	$	(266)	$	8,542

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets
Accounts receivable, accumulated provision for doubtful accounts (in dollars)	$ 6,139	$ 5,171
Common stock, par value (in dollars per share)
Common stock, authorized shares	320,000	320,000
Common stock, shares issued	175,384	175,684
Treasury stock, shares	23,882	24,800

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Statements of Consolidated Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statements of Consolidated Comprehensive Income
Net income	$ 138,264	$ 94,118	$ 349,199	$ 203,399
Net change in cash flow hedges:
Natural gas, net of tax (benefit) expense of $(12,984), $41,436, $(27,880) and $(10,147)	(19,307)	62,939	(41,238)	(15,495)
Interest rate, net of tax expense of $25, $25, $50 and $50	36	36	72	72
Pension and other post-retirement benefits liability adjustment, net of tax expense of $113, $306, $227 and $613	176	436	352	869
Other comprehensive (loss) income	(19,095)	63,411	(40,814)	(14,554)
Comprehensive income	119,169	157,529	308,385	188,845
Less: Comprehensive income attributable to noncontrolling interests	27,343	7,262	46,085	16,288
Comprehensive income attributable to EQT Corporation	$ 91,826	$ 150,267	$ 262,300	$ 172,557

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Revolving Credit Facilities

6 Months Ended

Jun. 30, 2014

Revolving Credit Facilities

Revolving Credit Facilities

H. Revolving Credit Facilities

As of June 30, 2014 and December 31, 2013, the Company had no loans or letters of credit outstanding under its revolving credit facility. The Company did not have any short-term loans outstanding at any time during the three and six months ended June 30, 2014 under its revolving credit facility. The maximum amount of the Company’s outstanding short-term loans at any time was $178.5 million during the three and six months ended June 30, 2013. The average daily balance of short-term loans outstanding was approximately $26.7 million and $13.4 million during the three and six months ended June 30, 2013, respectively, at weighted average interest rates of 0.83% and 0.41%, respectively.

As of June 30, 2014, the Partnership had $330 million of loans and no letters of credit outstanding under its revolving credit facility. As of December 31, 2013, the Partnership had no loans or letters of credit outstanding under its revolving credit facility. The maximum amount of outstanding short-term loans at any time under the Partnership’s revolving credit facility was $450 million during the three and six months ended June 30, 2014. The average daily balance of short-term loans outstanding was approximately $252.2 million and $173.0 million during the three and six months ended June 30, 2014, respectively, at a weighted average annual interest rate of 1.66% and 1.68%, respectively. The Partnership had no short-term loans outstanding at any time during the three and six months ended June 30, 2013.

The Company incurred commitment fees averaging approximately 6 basis points for the three months ended June 30, 2014 and 2013, and 12 basis points and 11 basis points for the six months ended June 30, 2014 and 2013, respectively, to maintain credit availability under its revolving credit facility. The Partnership incurred commitment fees averaging approximately 6 basis points and 13 basis points for the three and six months ended June 30, 2014 and 2013, respectively, to maintain credit availability under its revolving credit facility.

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Document and Entity Information In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Document and Entity Information
Entity Registrant Name	EQT Corp
Entity Central Index Key	0000033213
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	151,502
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share

Earnings Per Share

I. Earnings Per Share

Potentially dilutive securities, consisting of options and restricted stock awards, which were included in the calculation of diluted earnings per share, totaled 825,907 and 867,373 for the three months ended June 30, 2014 and 2013, respectively, and 1,014,746 and 766,054 for the six months ended June 30, 2014 and 2013, respectively.  There were no options to purchase common stock which were excluded from potentially dilutive securities because they were anti-dilutive for the three and six months ended June 30, 2014 and 2013.  The impact of the Partnership’s dilutive units did not have a material impact on the Company’s earnings per share calculations for any of the periods presented.

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Statements of Consolidated Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statements of Consolidated Comprehensive Income
Natural gas, tax (benefit) expense	$ (12,984)	$ 41,436	$ (27,880)	$ (10,147)
Interest rate, tax expense	25	25	50	50
Pension and other post-retirement benefits liability adjustment, tax expense	$ 113	$ 306	$ 227	$ 613

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EQT Midstream Partners, LP

6 Months Ended

Jun. 30, 2014

EQT Midstream Partners, LP

EQT Midstream Partners, LP

C. EQT Midstream Partners, LP

In 2012, the Company formed EQT Midstream Partners, LP (the Partnership) (NYSE: EQM) to own, operate, acquire and develop midstream assets in the Appalachian Basin. The Partnership provides midstream services to the Company and other third parties. The Partnership is consolidated in the Company’s consolidated financial statements. The Company records the noncontrolling interest of the public limited partners in its financial statements.

On May 7, 2014, a wholly-owned subsidiary of the Company contributed the Jupiter gathering system to EQM Gathering Opco, LLC (EQM Gathering), a wholly-owned subsidiary of the Partnership (the Jupiter Transaction) in exchange for $1.18 billion.  EQM Gathering is consolidated by the Company as it is still controlled by the Company.

On May 7, 2014, the Partnership completed an underwritten public offering of 12,362,500 common units, which included the full exercise of the underwriters’ overallotment option, representing Partnership limited partner interests. The Partnership received net proceeds of approximately $902.5 million from the offering, after deducting the underwriters’ discount and offering expenses of approximately $34 million. As of June 30, 2014, the Company held a 2% general partner interest, all incentive distribution rights and a 34.4% limited partner interest in the Partnership. The Company’s limited partner interest in the Partnership consists of 3,959,952 common units and 17,339,718 subordinated units.

While the Company did not record a gain for accounting purposes as a result of the Jupiter Transaction, the Company recognized a taxable gain for federal income tax purposes of approximately $569.3 million in 2014. In conjunction with the Jupiter Transaction, $500.0 million of the proceeds received were placed into a qualified trust account pursuant to a deferred exchange agreement, which allows for the use of the funds in a potential like-kind exchange for certain identified assets.  The Company utilized $157.3 million of these funds in connection with the exchange of certain assets with Range Resources Corporation (see Note K) and is evaluating the potential purchase of other eligible replacement properties within the statutory time period, which expires November 3, 2014.  As of June 30, 2014, the Company had restricted cash of $342.7 million in its Condensed Consolidated Balance Sheets.

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Discontinued Operations

6 Months Ended

Jun. 30, 2014

Discontinued Operations

Discontinued Operations

B. Discontinued Operations

On December 17, 2013, the Company and its wholly-owned subsidiary Distribution Holdco, LLC (Holdco) completed the disposition of their ownership interests in Equitable Gas Company, LLC (Equitable Gas) and Equitable Homeworks, LLC (Homeworks) to PNG Companies LLC (the Equitable Gas Transaction). Equitable Gas and Homeworks comprised substantially all of the Company’s previously reported Distribution segment.  The financial information of Equitable Gas and Homeworks is reflected as discontinued operations for all periods presented in these financial statements.  Prior periods have been recast to reflect this presentation.

During the second quarter of 2014, the Company received additional cash proceeds of $7.4 million as a result of post-closing purchase price adjustments for the Equitable Gas Transaction. The Company recognized an additional gain of $3.6 million for the three and six months ended June 30, 2014, included in income from discontinued operations, net of tax, in the Statements of Consolidated Income. As consideration for the Equitable Gas Transaction, the Company received total cash proceeds of $748.0 million, select midstream assets (including the Allegheny Valley Connector) with a fair value of $140.3 million and other contractual assets with a fair value of $32.5 million.

The following table summarizes the components of discontinued operations activity:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Operating revenues	$	–	$	56,573	$	–	$	210,619
Income from discontinued operations before income taxes	3,258		9,384		3,077		63,590
Income tax expense	1,382		3,825		1,305		22,990
Income from discontinued operations, net of tax	$	1,876	$	5,559	$	1,772	$	40,600

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Financial Information by Business Segment (Tables)

6 Months Ended

Jun. 30, 2014

Financial Information by Business Segment

Schedule of revenue from external customers and operating income (loss) and reconciliation to net income

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Revenues from external customers:
EQT Production	$	322,100	$	306,132	$	789,845	$	556,643
EQT Midstream	162,345		150,366		328,571		297,054
Third-party transportation and processing costs (a)	51,432		34,827		96,061		70,568
Less intersegment revenues, net (b)	(9,709)		(18,232)		(26,684)		(35,289)
Total	$	526,168	$	473,093	$	1,187,793	$	888,976
Operating income:
EQT Production (c)	$	144,689	$	105,056	$	421,894	$	179,153
EQT Midstream (c)	88,527		72,246		171,596		146,460
Unallocated expenses (d)	(8,445)		(15,322)		(11,928)		(19,154)
Total operating income	$	224,771	$	161,980	$	581,562	$	306,459

Reconciliation of operating income to income from continuing operations:

Other income	$	2,579	$	2,041	$	5,130	$	4,322
Interest expense	31,873		37,384		63,841		75,136
Income taxes	59,089		38,078		175,424		72,846
Income from continuing operations	$	136,388	$	88,559	$	347,427	$	162,799

(a)	This amount reflects the reclassification of third-party transportation and processing costs from operating revenues to transportation and processing costs at the consolidated level.
(b)	Includes entries to eliminate intercompany natural gas sales from EQT Production to EQT Midstream. The Company also had $9.1 million and $20.0 million for the three and six months ended June 30, 2013, respectively, of intercompany eliminations for transmission and storage services between EQT Midstream and the Company’s previously reported Distribution segment that were recast to discontinued operations as a result of the Equitable Gas Transaction. These recast adjustments had no impact on the Company’s net income for either of the three or six month periods ended June 30, 2013.
(c)	Gains on sales / exchanges of assets of $31.0 million and $6.8 million are included in EQT Production and EQT Midstream operating income, respectively, for the three and six months ended June 30, 2014.
(d)	Unallocated expenses consist primarily of incentive compensation expense, administrative costs and, for the three and six months ended June 30, 2013, corporate overhead charges previously allocated to the Distribution segment that were reclassified to Headquarters as part of the recast of the 2013 financial information in this Quarterly Report on Form 10-Q.

Schedule of segment assets

	As ofJune 30, 2014		As ofDecember 31, 2013
	(Thousands)
Segment assets:
EQT Production	$	7,191,308	$	6,359,065
EQT Midstream	2,486,643		2,514,429
Total operating segments	9,677,951		8,873,494
Headquarters assets, including cash and short-term investments	1,707,985		918,559
Total assets	$	11,385,936	$	9,792,053

Schedule of depreciation, depletion and amortization and expenditures for segment assets

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Depreciation, depletion and amortization:
EQT Production	$	136,251	$	144,073	$	267,490	$	268,982
EQT Midstream	21,130		18,452		42,139		36,671
Other	(162)		(52)		(299)		(144)
Total	$	157,219	$	162,473	$	309,330	$	305,509
Expenditures for segment assets (e):
EQT Production (f)	$	930,228	$	394,391	$	1,338,559	$	637,566
EQT Midstream	110,913		89,060		194,126		138,204
Other	802		1,872		1,362		2,220
Total	$	1,041,943	$	485,323	$	1,534,047	$	777,990

(e) Excludes non-cash capital expenditures of $3.6 million and $5.9 million for the three months ended June 30, 2014 and 2013, respectively, and $8.1 million and $11.9 million for the six months ended June 30, 2014 and 2013, respectively.  The Company capitalizes certain labor overhead costs including a portion of non-cash stock-based compensation expense.

(f) Includes $157.3 million of cash capital expenditures and $353.0 million of non-cash capital expenditures for the exchange of assets with Range Resources Corporation (described in Note K) for the three and six months ended June 30, 2014. Expenditures for segment assets in the EQT Production segment include $550.5 million and $128.9 million for property acquisitions during the three months ended June 30, 2014 and 2013, respectively, and $609.7 million and $141.6 million for property acquisitions during the six months ended June 30, 2014 and 2013, respectively.

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Changes in Accumulated Other Comprehensive Income by Component

6 Months Ended

Jun. 30, 2014

Changes in Accumulated Other Comprehensive Income by Component

Changes in Accumulated Other Comprehensive Income by Component

J.         Changes in Accumulated Other Comprehensive Income by Component

The following tables explain the changes in accumulated OCI by component during the applicable period:

	Three Months Ended June 30, 2014
	Natural gas cash flow hedges, net of tax						Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of April 1, 2014	$				39,768		$	(1,096)			$	(15,688)			$	22,984
Losses recognized in accumulated OCI, net of tax	(13,455)					(a)	–				–				(13,455)
Gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets	(16,735)					(a)	–				–				(16,735)
Losses reclassified from accumulated OCI, net of tax			10,883			(a)	36			(a)	176			(b)	11,095
Change in accumulated other comprehensive (loss) income, net of tax	(19,307)						36				176				(19,095)
Accumulated OCI (loss), net of tax, as of June 30, 2014	$				20,461		$	(1,060)			$	(15,512)			$	3,889
	Three Months Ended June 30, 2013
	Natural gas cash flow hedges, net of tax						Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of April 1, 2013	$			59,754			$		(1,240)		$		(36,932)		$		21,582
Gains recognized in accumulated OCI, net of tax	73,429					(a)	–				–				73,429
(Gains) losses reclassified from accumulated OCI, net of tax		(10,490)				(a)	36			(a)	436			(b)	(10,018)
Change in accumulated OCI, net of tax	62,939						36				436				63,411
Accumulated OCI (loss), net of tax, as of June 30, 2013	$			122,693			$		(1,204)		$		(36,496)		$		84,993

	Six Months Ended June 30, 2014
	Natural gas cash flow hedges, net of tax					Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2014	$			61,699		$	(1,132)			$	(15,864)			$	44,703
Losses recognized in accumulated OCI, net of tax	(52,649)				(a)	–				–				(52,649)
Gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets	(16,735)				(a)	–				–				(16,735)
Losses reclassified from accumulated OCI, net of tax		28,146			(a)	72			(a)	352			(b)	28,570
Change in accumulated other comprehensive (loss) income, net of tax	(41,238)					72				352				(40,814)
Accumulated OCI (loss), net of tax, as of June 30, 2014	$			20,461		$	(1,060)			$	(15,512)			$	3,889
	Six Months Ended June 30, 2013
	Natural gas cash flow hedges, net of tax					Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2013	$		138,188			$		(1,276)		$		(37,365)		$		99,547
Gains recognized in accumulated OCI, net of tax	20,828				(a)	–				–				20,828
(Gains) losses reclassified from accumulated OCI, net of tax		(36,323)			(a)	72			(a)	869			(b)	(35,382)
Change in accumulated other comprehensive (loss) income, net of tax	(15,495)					72				869				(14,554)
Accumulated OCI (loss), net of tax, as of June 30, 2013	$		122,693			$		(1,204)		$		(36,496)		$		84,993

(a) See Note E for additional information.

(b) This accumulated OCI reclassification is attributable to the net actuarial loss and net prior service cost related to the Company’s defined benefit pension plans and other post-retirement benefit plans.  See Note 13 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for additional information.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Fair Value Measurements

Fair Value Measurements

F. Fair Value Measurements

The Company records its financial instruments, principally derivative instruments, at fair value in its Condensed Consolidated Balance Sheets.  The Company has an established process for determining fair value which is based on quoted market prices, where available.  If quoted market prices are not available, fair value is based upon models that use as inputs market-based parameters, including but not limited to forward curves, discount rates, volatilities and nonperformance risk.  Nonperformance risk considers the effect of the Company’s credit standing on the fair value of liabilities and the effect of the counterparty’s credit standing on the fair value of assets.  The Company estimates nonperformance risk by analyzing publicly available market information, including a comparison of the yield on debt instruments with credit ratings similar to the Company’s or counterparty’s credit rating and the yield of a risk-free instrument.  The Company also considers credit default swaps rates where applicable.

The Company has categorized its assets and liabilities recorded at fair value into a three-level fair value hierarchy, based on the priority of the inputs to the valuation technique.  The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).  Assets and liabilities included in Level 1 include the Company’s futures contracts.  Assets and liabilities in Level 2 include the Company’s swap and collar agreements. As of December 31, 2013, the Company transferred $54.4 million of derivative instruments, primarily its collars, from Level 3 into Level 2.

The fair value of the assets and liabilities included in Level 2 is based on standard industry income approach models that use significant observable inputs, including NYMEX forward curves, LIBOR-based discount rates and basis forward curves.  The Company’s collars are valued using standard industry income approach models and were historically classified in Level 3 because the volatility assumption in the option pricing model was not observable over the full duration of the collars.  Effective December 31, 2013, the volatility assumption in the option pricing model is observable for the duration of the term of the collars outstanding. This change did not have a significant impact on the fair value of the derivative instruments previously included in Level 3. The significant observable inputs utilized by the option pricing model include NYMEX forward curves, natural gas volatilities and LIBOR-based discount rates.

The Company uses NYMEX forward curves to value futures, commodity swaps and collars. The NYMEX forward curves, LIBOR-based discount rates, natural gas volatilities and basis forward curves are validated to external sources at least monthly.

The following assets and liabilities were measured at fair value on a recurring basis during the applicable period:

			Fair value measurements at reporting date using
Description	As of June 30, 2014		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	66,408	$	123	$	66,285	$	–
Liabilities
Derivative instruments, at fair value	$	58,116	$	–	$	58,116	$	–

			Fair value measurements at reporting date using
Description	As of December 31, 2013		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	107,647	$	240	$	107,407	$	–
Liabilities
Derivative instruments, at fair value	$	29,651	$	315	$	29,336	$	–

	Fair value measurements using significant unobservable inputs (Level 3) Derivative instruments, at fair value, net
	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(Thousands)
Beginning of period	$	–	$	69,865	$	–	$	90,714
Total gains or losses:
Included in earnings	–		(1,178)		–		(755)
Included in OCI	–		13,125		–		1,392
Purchases	–		–		–		72
Settlements	–		(7,124)		–		(16,735)
Transfers in and/or out of Level 3	–		–		–		–
End of period	$	–	$	74,688	$	–	$	74,688

Losses of $1.2 million are included in earnings in the table above for the three and six months ended June 30, 2013, respectively, attributable to the change in unrealized gains or losses relating to assets held as of June 30, 2013.

The carrying value of cash equivalents approximates fair value due to the short maturity of the instruments; these are considered Level 1 fair values.

The Company estimates the fair value of its debt using its established fair value methodology.  Because not all of the Company’s debt is actively traded, the fair value of the debt is a Level 2 fair value measurement.  Fair value for non-traded debt obligations is estimated using a standard industry income approach model which utilizes a discount rate based on market rates for debt with similar remaining time to maturity and credit risk.  The estimated fair value of long-term debt on the Condensed Consolidated Balance Sheets at June 30, 2014 and December 31, 2013 was approximately $2.9 billion and $2.8 billion, respectively.

For information on the fair value of certain assets acquired from the exchange of properties with Range Resources Corporation, see Note K.

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Financial Information by Business Segment

6 Months Ended

Jun. 30, 2014

Financial Information by Business Segment

Financial Information by Business Segment

D. Financial Information by Business Segment

Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and which are subject to evaluation by the Company’s chief operating decision maker in deciding how to allocate resources.

The Company reports its operations in two segments, which reflect its lines of business.  The EQT Production segment includes the Company’s exploration for, and development and production of, natural gas, natural gas liquids (NGLs) and a limited amount of crude oil in the Appalachian and Permian Basins.  The EQT Midstream segment’s operations include the natural gas gathering, transportation, storage and marketing activities of the Company, including ownership and operation of the Partnership.

Operating segments are evaluated on their contribution to the Company’s consolidated results based on operating income. Other income, interest and income taxes are managed on a consolidated basis. Headquarters’ costs are billed to the operating segments based upon an allocation of the headquarters’ annual operating budget.  Differences between budget and actual headquarters’ expenses are not allocated to the operating segments.

The Company’s management reviews and reports the EQT Production segment results with third-party transportation and processing costs reflected as a deduction from operating revenues. Third-party costs incurred to gather, process and transport gas produced by EQT Production to market sales points are recorded as a portion of transportation and processing costs in the Statements of Consolidated Income. Some transportation costs incurred by the Company are marketed for resale and are not incurred to transport gas produced by EQT Production.  These transportation costs are reflected as a deduction from operating revenues.

Substantially all of the Company’s operating revenues, income from operations and assets are generated or located in the United States.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Revenues from external customers:
EQT Production	$	322,100	$	306,132	$	789,845	$	556,643
EQT Midstream	162,345		150,366		328,571		297,054
Third-party transportation and processing costs (a)	51,432		34,827		96,061		70,568
Less intersegment revenues, net (b)	(9,709)		(18,232)		(26,684)		(35,289)
Total	$	526,168	$	473,093	$	1,187,793	$	888,976
Operating income:
EQT Production (c)	$	144,689	$	105,056	$	421,894	$	179,153
EQT Midstream (c)	88,527		72,246		171,596		146,460
Unallocated expenses (d)	(8,445)		(15,322)		(11,928)		(19,154)
Total operating income	$	224,771	$	161,980	$	581,562	$	306,459

Reconciliation of operating income to income from continuing operations:

Other income	$	2,579	$	2,041	$	5,130	$	4,322
Interest expense	31,873		37,384		63,841		75,136
Income taxes	59,089		38,078		175,424		72,846
Income from continuing operations	$	136,388	$	88,559	$	347,427	$	162,799

	As ofJune 30, 2014		As ofDecember 31, 2013
	(Thousands)
Segment assets:
EQT Production	$	7,191,308	$	6,359,065
EQT Midstream	2,486,643		2,514,429
Total operating segments	9,677,951		8,873,494
Headquarters assets, including cash and short-term investments	1,707,985		918,559
Total assets	$	11,385,936	$	9,792,053

(a)	This amount reflects the reclassification of third-party transportation and processing costs from operating revenues to transportation and processing costs at the consolidated level.
(b)	Includes entries to eliminate intercompany natural gas sales from EQT Production to EQT Midstream. The Company also had $9.1 million and $20.0 million for the three and six months ended June 30, 2013, respectively, of intercompany eliminations for transmission and storage services between EQT Midstream and the Company’s previously reported Distribution segment that were recast to discontinued operations as a result of the Equitable Gas Transaction. These recast adjustments had no impact on the Company’s net income for either of the three or six month periods ended June 30, 2013.
(c)	Gains on sales / exchanges of assets of $31.0 million and $6.8 million are included in EQT Production and EQT Midstream operating income, respectively, for the three and six months ended June 30, 2014.
(d)	Unallocated expenses consist primarily of incentive compensation expense, administrative costs and, for the three and six months ended June 30, 2013, corporate overhead charges previously allocated to the Distribution segment that were reclassified to Headquarters as part of the recast of the 2013 financial information in this Quarterly Report on Form 10-Q.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Depreciation, depletion and amortization:
EQT Production	$	136,251	$	144,073	$	267,490	$	268,982
EQT Midstream	21,130		18,452		42,139		36,671
Other	(162)		(52)		(299)		(144)
Total	$	157,219	$	162,473	$	309,330	$	305,509
Expenditures for segment assets (e):
EQT Production (f)	$	930,228	$	394,391	$	1,338,559	$	637,566
EQT Midstream	110,913		89,060		194,126		138,204
Other	802		1,872		1,362		2,220
Total	$	1,041,943	$	485,323	$	1,534,047	$	777,990

(e) Excludes non-cash capital expenditures of $3.6 million and $5.9 million for the three months ended June 30, 2014 and 2013, respectively, and $8.1 million and $11.9 million for the six months ended June 30, 2014 and 2013, respectively.  The Company capitalizes certain labor overhead costs including a portion of non-cash stock-based compensation expense.

(f) Includes $157.3 million of cash capital expenditures and $353.0 million of non-cash capital expenditures for the exchange of assets with Range Resources Corporation (described in Note K) for the three and six months ended June 30, 2014. Expenditures for segment assets in the EQT Production segment include $550.5 million and $128.9 million for property acquisitions during the three months ended June 30, 2014 and 2013, respectively, and $609.7 million and $141.6 million for property acquisitions during the six months ended June 30, 2014 and 2013, respectively.

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Derivative Instruments

6 Months Ended

Jun. 30, 2014

Derivative Instruments

Derivative Instruments

E. Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the operating results of the Company primarily at EQT Production and the storage, marketing and other activities at EQT Midstream. The Company’s overall objective in its hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

The Company uses over the counter (OTC) derivative commodity instruments that are primarily placed with financial institutions, and the creditworthiness of these institutions is regularly monitored. The Company also uses exchange traded futures contracts that obligate the Company to buy or sell a designated commodity at a future date for a specified price and quantity at a specified location. Swap agreements involve payments to or receipts from counterparties based on the differential between two prices for the commodity. Collar agreements require the counterparty to pay the Company if the index price falls below the floor price and the Company to pay the counterparty if the index price rises above the cap price. The Company may also engage in a limited number of basis swaps to protect earnings from undue exposure to the risk of geographic disparities in commodity prices and interest rate swaps to hedge exposure to interest rate fluctuations on potential debt issuances.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. These assets and liabilities are reported in the Condensed Consolidated Balance Sheets as derivative instruments at fair value. These derivative instruments are reported as either current assets or current liabilities due to their highly liquid nature. The Company can net settle its derivative instruments at any time.

The accounting for the changes in fair value of the Company’s derivative instruments depends on the use of the derivative instruments.  To the extent that a derivative instrument has been designated and qualifies as a cash flow hedge, the effective portion of the change in fair value of the derivative instrument is reported as a component of accumulated other comprehensive income (OCI), net of tax, and is subsequently reclassified into the Statements of Consolidated Income in the same period or periods during which the forecasted transaction affects earnings.  In conjunction with the exchange of assets with Range Resources Corporation that closed on June 16, 2014 (see Note K), the Company de-designated certain derivative instruments that were previously designated as cash flow hedges because it was probable that the forecasted transactions would not occur, resulting in a pre-tax gain of $28.0 million recorded within gain on sale / exchange of assets in the Statements of Consolidated Income for the three and six months ended June 30, 2014.  Any subsequent changes in fair value of these derivative instruments are recognized within operating revenues in the Statements of Consolidated Income each period.

For a derivative instrument designated and qualified as a fair value hedge, the change in the fair value of the instrument is recognized as a portion of operating revenues in the Statements of Consolidated Income each period.  In addition, the change in the fair value of the hedged item (natural gas inventory) was recognized as a portion of operating revenues in the Statements of Consolidated Income. The Company elected to exclude the spot/forward differential for the assessment of effectiveness of the fair value hedges.

Most of the derivative commodity instruments used by the Company to hedge its exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sale of equity production have been designated and qualify as cash flow hedges. Historically, some of the derivative commodity instruments used by the Company to hedge its exposure to adverse changes in the market price of natural gas stored in the ground were designated and qualified as fair value hedges. These positions were de-designated effective October 1, 2013. Basis swaps are not designated as cash flow hedges. Any hedging ineffectiveness and any change in fair value of derivative instruments that have not been designated as hedges are recognized in the Statements of Consolidated Income each period.

The Company also enters into fixed price natural gas sales agreements that are satisfied by physical delivery.  These physical commodity contracts qualify for the normal purchases and sales exception and are not subject to derivative instrument accounting.

Exchange-traded instruments are generally settled with offsetting positions. OTC arrangements require settlement in cash. Settlements of derivative commodity instruments are reported as a component of cash flows from operations in the accompanying Statements of Condensed Consolidated Cash Flows.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Thousands)
Commodity derivatives designated as cash flow hedges
Amount of (loss) gain recognized in OCI (effective portion), net of tax	$	(13,455)	$	73,429	$	(52,649)	$	20,828
Amount of gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets due to forecasted transactions probable to not occur	16,735		–		16,735		–
Amount of (loss) gain reclassified from accumulated OCI into operating revenues (effective portion), net of tax	(10,883)		10,490		(28,146)		36,323
Amount of gain (loss) recognized in operating revenues (ineffective portion) (a)	987		(7,473)		(21,273)		(7,954)
Interest rate derivatives designated as cash flow hedges
Amount of loss reclassified from accumulated OCI, net of tax, into interest expense (effective portion)	$	36	$	36	$	72	$	72
Commodity derivatives designated as fair value hedges (b)
Amount of gain (loss) recognized in operating revenues for fair value commodity contracts	$	–	$	2,700	$	–	$	(839)
Fair value (loss) gain recognized in operating revenues for inventory designated as hedged item	–		(4,075)			–	462
Derivatives not designated as hedging instruments
Amount of (loss) gain recognized in operating revenues	$	(8,525)	$	1,512	$	(17,879)	$	1,250

(a) No amounts have been excluded from effectiveness testing of cash flow hedges.

(b) For the three months ended June 30, 2013, the net impact on operating revenues consisted of a $0.8 million gain due to the exclusion of the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $2.2 million loss due to changes in basis. For the six months ended June 30, 2013, the net impact on operating revenues consisted of a $2.1 million gain due to the exclusion of the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $2.5 million loss due to changes in basis.

	As of June 30,		As of December 31,
	2014		2013
	(Thousands)
Asset derivatives
Commodity derivatives designated as hedging instruments	$	33,942	$	104,430
Commodity derivatives not designated as hedging instruments	32,466		3,217
Total asset derivatives	$	66,408	$	107,647
Liability derivatives
Commodity derivatives designated as hedging instruments	$	47,713	$	27,618
Commodity derivatives not designated as hedging instruments	10,403		2,033
Total liability derivatives	$	58,116	$	29,651

The net fair value of derivative commodity instruments changed during the first half of 2014 primarily as a result of increased New York Mercantile Exchange (NYMEX) forward prices and settlements.  The absolute quantities of the Company’s derivative commodity instruments that have been designated and qualify as cash flow hedges totaled 307 Bcf and 398 Bcf as of June 30, 2014 and December 31, 2013, respectively, and are primarily related to natural gas swaps and collars. The open positions at June 30, 2014 and December 31, 2013 had maturities extending through December 2018 and December 2017, respectively.

The Company deferred net gains of $20.5 million and $61.7 million in accumulated OCI, net of tax, as of June 30, 2014 and December 31, 2013, respectively, associated with the effective portion of the change in fair value of its derivative commodity instruments designated as cash flow hedges. Assuming no change in price or new transactions, the Company estimates that approximately $8.5 million of net unrealized gains on its derivative commodity instruments reflected in accumulated OCI, net of tax, as of June 30, 2014 will be recognized in earnings during the next twelve months due to the settlement of hedged transactions.

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts.  This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. The Company believes that NYMEX traded futures contracts have limited credit risk because Commodity Futures Trading Commission regulations are in place to protect exchange participants, including the Company, from potential financial instability of the exchange members. The Company’s OTC swap and collar derivative instruments are primarily placed with financial institutions and thus are subject to events that would impact those companies individually as well as that industry as a whole.

The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposures.  These include closely monitoring current market conditions, counterparty credit fundamentals and credit default swap rates.  Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals. To manage the level of credit risk, the Company enters into transactions with financial counterparties that are of investment grade or better, enters into netting agreements whenever possible and may obtain collateral or other security.

When the net fair value of any of the Company’s swap agreements represents a liability to the Company which is in excess of the agreed-upon threshold between the Company and the financial institution acting as counterparty, the counterparty requires the Company to remit funds to the counterparty as a margin deposit for the derivative liability which is in excess of the threshold amount.  The Company records these deposits as a current asset.  When the net fair value of any of the Company’s swap agreements represents an asset to the Company which is in excess of the agreed-upon threshold between the Company and the financial institution acting as counterparty, the Company requires the counterparty to remit funds as margin deposits in an amount equal to the portion of the derivative asset which is in excess of the threshold amount. The Company records a current liability for such amounts received.  The Company had no such deposits in its Condensed Consolidated Balance Sheets as of June 30, 2014 or December 31, 2013.

When the Company enters into exchange-traded natural gas contracts, exchanges may require the Company to remit funds to the corresponding broker as good-faith deposits to guard against the risks associated with changing market conditions.  The Company must make such deposits based on an established initial margin requirement as well as the net liability position, if any, of the fair value of the associated contracts.  The Company records these deposits as a current asset in the Condensed Consolidated Balance Sheets.  In the case where the fair value of such contracts is in a net asset position, the broker may remit funds to the Company, in which case the Company records a current liability for such amounts received. The initial margin requirements are established by the exchanges based on the price, volatility and the time to expiration of the related contract.  The margin requirements are subject to change at the exchanges’ discretion.  The Company recorded current assets of $0.1 million and $0.3 million as of June 30, 2014 and December 31, 2013, respectively, for such deposits in its Condensed Consolidated Balance Sheets.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. Margin deposits remitted to financial counterparties or received from financial counterparties related to OTC natural gas swap agreements and options and any funds remitted to or deposits received from the Company’s brokers are recorded on a gross basis.  The Company has netting agreements with financial institutions and its brokers that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities. The table below reflects the impact of netting agreements and margin deposits on gross derivative assets and liabilities as of June 30, 2014 and December 31, 2013.

As of June 30, 2014	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	66,408	$	(26,331)	$	–	$	40,077
Liability derivatives:
Derivative instruments, at fair value	$	58,116	$	(26,331)	$	(103)	$	31,682

As of December 31, 2013	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to  master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	107,647	$	(20,843)	$	–	$	86,804
Liability derivatives:
Derivative instruments, at fair value	$	29,651	$	(20,843)	$	(266)	$	8,542

Certain of the Company’s derivative instrument contracts provide that if the Company’s credit ratings by Standard & Poor’s Ratings Services (S&P) or Moody’s Investors Services (Moody’s) are lowered below investment grade, additional collateral must be deposited with the counterparty.  The additional collateral can be up to 100% of the derivative liability.  As of June 30, 2014, the aggregate fair value of all derivative instruments with credit risk-related contingent features that were in a net liability position was $31.9 million, for which the Company had no collateral posted on June 30, 2014.  If the Company’s credit rating by S&P or Moody’s had been downgraded below investment grade on June 30, 2014, the Company would have been required to post $1.1 million of additional collateral under the agreements with the respective counterparties.  Investment grade refers to the quality of the Company’s credit as assessed by one or more credit rating agencies. The Company’s senior unsecured debt was rated BBB by S&P and Baa3 by Moody’s at June 30, 2014.  In order to be considered investment grade, the Company must be rated BBB- or higher by S&P and Baa3 or higher by Moody’s.  Anything below these ratings is considered non-investment grade.

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Taxes

Income Taxes

G. Income Taxes

The Company estimates an annual effective income tax rate based on projected results for the year and applies this rate to income before taxes to calculate income tax expense.  However, while all of the Partnership’s earnings are included in the Company’s net income, the Company is not required to record income tax expense with respect to the portion of the Partnership’s earnings allocated to its noncontrolling public limited partners, which reduces the Company’s effective tax rate.  Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period.

The Company’s effective income tax rate for the six months ended June 30, 2014 was 33.6%, compared to 30.9% for the six months ended June 30, 2013.  The increase in the effective income tax rate from the first half of 2013 is primarily attributable to a reduction in a valuation allowance related to bonus depreciation for state tax purposes in 2013, increased state tax expense in 2014 due to higher natural gas prices and production sales volumes as well as increased tax reserves recorded in certain states in 2014, partially offset by the impact of the Partnership’s ownership structure.

There were no material changes to the Company’s methodology for determining unrecognized tax benefits during the three months ended June 30, 2014.  The Company believes that it is appropriately reserved for uncertain tax positions.

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Fair Value Measurements (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Fair Value Measurements
Fair value derivative instruments Level 3 to Level 2 Transfers Amount		$ 54,400,000
Fair value on a recurring basis | Fair Value
Assets
Derivative instruments, at fair value	66,408,000	107,647,000
Liabilities
Derivative instruments, at fair value	58,116,000	29,651,000
Fair value on a recurring basis | Quoted prices in active markets for identical assets (Level 1)
Assets
Derivative instruments, at fair value	123,000	240,000
Liabilities
Derivative instruments, at fair value		315,000
Fair value on a recurring basis | Significant other observable inputs (Level 2)
Assets
Derivative instruments, at fair value	66,285,000	107,407,000
Liabilities
Derivative instruments, at fair value	$ 58,116,000	$ 29,336,000

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Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2014

Recently Issued Accounting Standards

Recently Issued Accounting Standards

L.        Recently Issued Accounting Standards

In April 2014, the Financial Accounting Standards Board (FASB) issued an accounting standards update (ASU) that raised the threshold for a disposal to qualify as a discontinued operation and requires new disclosures for both discontinued operations and certain other material disposal transactions that do not meet the revised definition of a discontinued operation. Under the updated standard, a disposal of a component or group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components of the entity (1) has been disposed of by a sale, (2) has been disposed of other than by sale or (3) is classified as held for sale. This ASU is effective for annual periods beginning on or after December 15, 2014 and is applied prospectively. Early adoption is permitted but only for disposals (or classifications that are held for sale) that have not been reported in financial statements previously issued or available for use. The Company adopted this new standard in the second quarter of 2014. The sale of Nora LLC discussed in Note K did not meet the definition of a discontinued operation and was not deemed an individually material disposal transaction.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU No. 2014-09 will replace most of the existing revenue recognition requirements in United States GAAP when it becomes effective. The guidance in ASU No. 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods therein.  Early adoption is not permitted.  The Company is currently evaluating the method of adoption and impact this standard will have on its financial statements and related disclosures.

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Changes in Accumulated Other Comprehensive Income by Component (Tables)

6 Months Ended

Jun. 30, 2014

Changes in Accumulated Other Comprehensive Income by Component

Schedule of the changes in accumulated OCI by component

	Three Months Ended June 30, 2014
	Natural gas cash flow hedges, net of tax						Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of April 1, 2014	$				39,768		$	(1,096)			$	(15,688)			$	22,984
Losses recognized in accumulated OCI, net of tax	(13,455)					(a)	–				–				(13,455)
Gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets	(16,735)					(a)	–				–				(16,735)
Losses reclassified from accumulated OCI, net of tax			10,883			(a)	36			(a)	176			(b)	11,095
Change in accumulated other comprehensive (loss) income, net of tax	(19,307)						36				176				(19,095)
Accumulated OCI (loss), net of tax, as of June 30, 2014	$				20,461		$	(1,060)			$	(15,512)			$	3,889
	Three Months Ended June 30, 2013
	Natural gas cash flow hedges, net of tax						Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of April 1, 2013	$			59,754			$		(1,240)		$		(36,932)		$		21,582
Gains recognized in accumulated OCI, net of tax	73,429					(a)	–				–				73,429
(Gains) losses reclassified from accumulated OCI, net of tax		(10,490)				(a)	36			(a)	436			(b)	(10,018)
Change in accumulated OCI, net of tax	62,939						36				436				63,411
Accumulated OCI (loss), net of tax, as of June 30, 2013	$			122,693			$		(1,204)		$		(36,496)		$		84,993

	Six Months Ended June 30, 2014
	Natural gas cash flow hedges, net of tax					Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2014	$			61,699		$	(1,132)			$	(15,864)			$	44,703
Losses recognized in accumulated OCI, net of tax	(52,649)				(a)	–				–				(52,649)
Gain reclassified from accumulated OCI, net of tax, into gain on sale / exchange of assets	(16,735)				(a)	–				–				(16,735)
Losses reclassified from accumulated OCI, net of tax		28,146			(a)	72			(a)	352			(b)	28,570
Change in accumulated other comprehensive (loss) income, net of tax	(41,238)					72				352				(40,814)
Accumulated OCI (loss), net of tax, as of June 30, 2014	$			20,461		$	(1,060)			$	(15,512)			$	3,889
	Six Months Ended June 30, 2013
	Natural gas cash flow hedges, net of tax					Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI (loss), net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2013	$		138,188			$		(1,276)		$		(37,365)		$		99,547
Gains recognized in accumulated OCI, net of tax	20,828				(a)	–				–				20,828
(Gains) losses reclassified from accumulated OCI, net of tax		(36,323)			(a)	72			(a)	869			(b)	(35,382)
Change in accumulated other comprehensive (loss) income, net of tax	(15,495)					72				869				(14,554)
Accumulated OCI (loss), net of tax, as of June 30, 2013	$		122,693			$		(1,204)		$		(36,496)		$		84,993

(a) See Note E for additional information.

(b) This accumulated OCI reclassification is attributable to the net actuarial loss and net prior service cost related to the Company’s defined benefit pension plans and other post-retirement benefit plans.  See Note 13 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for additional information.

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Statements of Condensed Consolidated Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income	$ 349,199	$ 203,399
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	54,577	63,252
Depreciation, depletion, and amortization	309,330	317,693
Gain on sale / exchange of assets	(37,749)
Gain on dispositions	(3,598)
Provision for losses on accounts receivable	919	2,246
Other income	(5,130)	(4,441)
Stock-based compensation expense	20,810	27,480
Loss recognized in operating revenues for hedging ineffectiveness	21,273	7,954
Loss (gain) on derivatives not designated as hedges	17,879	(1,250)
Cash settlements on derivatives not designated as hedges	(10,836)	372
Lease impairment	6,519	8,133
Changes in other assets and liabilities:
Dividend from Nora Gathering, LLC	9,463	4,500
Excess tax benefits on stock-based compensation	(28,497)
Accounts receivable and unbilled revenues	(443)	(11,093)
Inventory	6,267	23,952
Accounts payable	50,952	(18,005)
Other items, net	33,712	(27,232)
Net cash provided by operating activities	794,647	596,960
Cash flows from investing activities:
Capital expenditures from continuing operations	(1,023,747)	(777,990)
Capital expenditures associated with Range asset exchange	(157,256)
Capital expenditures from discontinued operations		(15,163)
Restricted cash, net	(342,744)
Proceeds from sale of assets	7,444
Net cash used in investing activities	(1,516,303)	(793,153)
Cash flows from financing activities:
Proceeds from the issuance of common units of EQT Midstream Partners, LP, net of issuance costs	902,451
Increase in short-term loans	450,000	185,500
Decrease in short-term loans	(120,000)	(130,500)
Dividends paid	(9,101)	(9,038)
Distributions to noncontrolling interests	(25,674)	(10,350)
Repayments and retirements of long-term debt	(3,169)	(20,161)
Proceeds and tax benefits from exercises under employee compensation plans	42,042	15,387
Cash paid for taxes related to net settlement of share-based payment awards	(48,826)
Revolving credit facility origination fees	(5,075)
Repurchase and retirement of common stock	(32,368)
Net cash provided by financing activities	1,150,280	30,838
Net change in cash and cash equivalents	428,624	(165,355)
Cash and cash equivalents at beginning of period	845,641	182,055
Cash and cash equivalents at end of period	1,274,265	16,700
Cash paid during the period for:
Interest, net of amount capitalized	62,519	75,281
Income taxes, net	$ 89,050	$ 25,061

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Financial Statements

6 Months Ended

Jun. 30, 2014

Financial Statements

Financial Statements

A. Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by United States GAAP for complete financial statements.  In the opinion of management, these statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQT Corporation and subsidiaries as of June 30, 2014 and December 31, 2013, the results of its operations for the three and six month periods ended June 30, 2014 and 2013 and its cash flows for the six month periods ended June 30, 2014 and 2013.  In this Quarterly Report on Form 10-Q, references to “we,” “us,” “our,” “EQT,” “EQT Corporation,” and the “Company” refer collectively to EQT Corporation and its consolidated subsidiaries.

Certain previously reported amounts have been reclassified to conform to the current year presentation. Additionally, financial statements and notes to the financial statements previously reported in prior periods have been recast to reflect the presentation of discontinued operations as a result of the Equitable Gas Transaction. Refer to Note B for additional information regarding discontinued operations.

The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by United States GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in EQT Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013 as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 22 of this Quarterly Report on Form 10-Q.

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Discontinued Operations (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Summary of the discontinued operations activity
Operating revenues		$ 56,573,000		$ 210,619,000
Income from discontinued operations before income taxes	3,258,000	9,384,000	3,077,000	63,590,000
Income tax expense	1,382,000	3,825,000	1,305,000	22,990,000
Income from discontinued operations, net of tax	1,876,000	5,559,000	1,772,000	40,600,000
Equitable Gas and Homeworks
Discontinued operations
Additional cash proceeds as a result of post-closing purchase price adjustments	7,400,000
Cash proceeds received	748,000,000
Additional gain on sale of business	3,600,000		3,600,000
Fair value of assets	140,300,000		140,300,000
Fair value of other contractual assets	$ 32,500,000		$ 32,500,000

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Earnings Per Share (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Potentially dilutive securities:
Stock options and awards (in shares)	825,907	867,373	1,014,746	766,054
Options to purchase common stock excluded from potentially dilutive securities (in shares)	0	0	0	0

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Sale and Exchange of Properties

6 Months Ended

Jun. 30, 2014

Sale and Exchange of Properties

Sale and Exchange of Properties

K.        Sale and Exchange of Properties

In April 2014, the Company executed an agreement to exchange certain assets with Range Resources Corporation (Range).  The transaction closed on June 16, 2014.  The Company received approximately 73,000 net acres and approximately 900 producing wells, most of which are vertical wells, in the Permian Basin of Texas. In exchange, Range received  approximately 138,000 net acres in the Company’s Nora field of Virginia (Nora), the Company’s working interest in approximately 2,000 producing vertical wells in Nora, the Company’s remaining 50% ownership interest in Nora Gathering, LLC (Nora LLC), which owns the supporting gathering system in Nora, and $157.3 million in cash, subject to certain post-closing purchase price adjustments.  The Company previously recorded its 50% ownership interest in Nora LLC as a nonconsolidated investment in its consolidated financial statements. Portions of the exchange of assets with Range are intended to qualify as a tax free asset exchange.

The fair value of the assets exchanged by the Company was approximately $510.3 million. The Company is in the process of finalizing the allocation between the acquired acreage and the acquired wells. The Company recorded a pre-tax gain of $37.7 million, which is included in gain on sale / exchange of assets in the Statements of Consolidated Income. The gain on sale / exchange of assets includes a $28.0 million pre-tax gain related to the de-designation of certain derivative instruments that were previously designated as cash flow hedges because it was probable that the forecasted transactions would not occur.

As the asset exchange qualifies as a business combination under United States GAAP, the fair value of the acquired assets was determined using a discounted cash flow model under the market approach. Significant unobservable inputs used in the analysis included the determination of estimated developed reserves, NYMEX forward pricing and comparable sales transactions, which classify the acquired assets as a Level 3 measurement.